Investors Might Not Agree, But Barron’s Thinks Apple Is Stellar
Apple’s (NASDAQ:AAPL) stock might be losing cachet and altitude, but the company’s operating performance was good enough to propel it to the number one spot on Barron’s annual survey of the top 500 companies with stellar performances — a jump from 2012’s number two ranking and 2011’s number four ranking. “Apple has shown what it takes — terrific sales growth and wisely deployed cash flow — to be a winner in our annual ranking, which seeks to identify businesses that have done the best job of investing for growth,” noted the publication on Saturday.
Still, investors are worried that Apple’s magic cannot last; they have bid the stock down from last September’s high of $705 to $450. The sell-off was so great that shares even brushed a 52-week low of $385.10 in mid-April and $239 billion was erased from the company’s market value. However, while many commentators in the finance world and the technology world have now labeled the iPhone maker as a has-been, or at the very least an ordinary company, Apple is still leading several very densely populated and competitive markets, and the company’s “triumph over a tough crowd of competitors” put it on top of Barron’s list.
Companies become successful through a combination of vision, creativity, judgement, and circumstance, including Apple. The company’s position in the rankings reflects its successes in those areas along with the improving economic conditions and smart decision-making on the part of its executives.
The top 30 companies listed in Barron’s survey also included credit-card issuers Visa (NYSE:V), MasterCard (NYSE:MA), Discover (NYSE:DFS), and American Express (NYSE:AXP), which have benefited from recent declining loan losses. Energy producers — including CVR Energy (NYSE:CVI), at the number 12 spot, and National Oilwell Varco (NYSE:NOV, at number 22 — received top billing as well because the domestic drilling boom and high oil prices have returned large profits to the sector.
The list also flagged companies that need to do better; thanks to its recent customer and sales losses, J.C. Penney (NYSE:JCP) was ranked 500, while Bank of America (NYSE:BAC) came in at number 496. However, the list is fluid; 26 companies that missed the 2012 list were included in this year’s rankings. But both Yahoo (NASDAQ:YHOO) and Charles Schwab (NYSE:SCHW), whose sales fell below the $5 billion cut off, were left off the latest ranking
Barron’s 500 ranking is populated by publicly traded companies in the United States and Canada, which are chosen based on their total sales in the latest fiscal year, median three-year cash flow, and the one-year change in cash flow relative to the three-year average. In total, eight companies earned straight A’s, compared with only four last year.
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