As Validea notes, Buffett embraces companies with wide competitive moats and predictable earnings, two labels that apply to Apple. Buffett also has a penchant for investing in cash-rich firms with strong balance sheets. With nearly $180 billion in cash, more than the market values of all but a small amount of S&P 500 member firms, Apple fits that bill as well. [Apple’s Ascent and Its ETF Impact]
Apple could pay of its debt with just two years worth of earnings, which is considered exceptional, according to Validea. On the basis of higher-than-average return on return on equity and return on total capital, Apple also would also pass the Buffett smell test, according to Validea.
“VALX is not beholden to any one strategy type; its 17 identifiable strategies are a mixture of value, growth and momentum strategies. VALX is also not hemmed in by market-cap restrictions; its holdings span the small-, mid-, and large-cap universes,” notes Charles Sizemore.
Validea Market Legends ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Apple.