Respectfully Yours, Apple
Jun 25th 2012 11:38PM
Updated Jun 25th 2012 11:40PM
The world's most valuable tech company lost its visionary CEO, and investors have suffered through a stagnant share price in recent months, but it's nonetheless the right choice to repeat as the world's most respected company. Apple's stock is still trading sharply higher than it was a year ago, and in terms of delivering blowout quarterly results and well-received product rollouts, new CEO Tim Cook hasn't missed a beat.
No disrespect, but ...
Barron's polls professional money managers on the world's 100 largest publicly traded companies, and 116 respondents complied by giving each of the 100 companies one of four "respect score" ratings.
It's not a perfect sample. All but one of the top 24 companies on the final ranked list is American, a byproduct of relying on stateside money managers for their opinions. How many of them truly have an opinion on Colombia's Ecopetrol or Russia's Sberbank Rossia?
There will also naturally be a bias in the opinions. Berkshire Hathaway (NYS: BRK.A) (NYS: BRK.B) , for example, fell from third last year to a surprising No. 15 this year. It's true that the iconic holding company has had a few subpar years lately, and concerns about Warren Buffett's health may also be weighing on opinions.
However, the most likely bandit here -- and it's something that Barron's does realize -- is that Buffett himself didn't make too many friends by advocating that upper-income Americans should be paying more in taxes. When you're a likely affluent money manager guiding investment strategies for affluent clients, the "Buffett tax" isn't going to be very popular.
Big Blue isn't all that blue
Jumping two slots to second place this year is IBM (NYS: IBM) .
Now, keep in mind that there's a big gap between Apple and everybody else. A whopping 71% of the money managers tagged Apple with the best "Respect Highly" rating in the poll. There was no other company where half or more of the poll participants felt that way.
IBM is still a quality company, of course. It has managed to evolve into a star in business services, and that's something that today's major PC makers are trying desperately to duplicate. However, it's probably not fair to say that IBM clawed its way higher. It probably moved up by default. IBM took advantage of Buffett's political posturing to move up one slot. Big Blue then overtook Amazon.com (NAS: AMZN) , which fell from second to fourth, to become the most admired company aside from Apple.
Bezos is no Bozo
Amazon's slip is understandable. The company's push to get its Kindle and Kindle Fire lines rolling has forced the leading online retailer to sacrifice near-term margins for the sake of market share. The past year has also seen Amazon cave in to some instances of striking deals where it will start collecting state sales taxes, eating into its pricing advantage over bricks-and-mortar competitors.
CEO Jeff Bezos knows what he's doing. The company's growth has been impressive, especially for a retailer of its size. The problem is that the stock is trading merely marginally higher than where it was a year ago. IBM and Apple have managed to pull off market-thumping results.
It's also harder for money managers that used to justify Amazon's lofty earnings multiple by pointing to the far more attractive cash-flow metrics to make that argument these days. Selling Kindles at a likely loss and hoping to make back the difference in digital sales down the line isn't doing the company's fiscal fortitude any favors.
Either way, Amazon and IBM are no Apple.
There are plenty of companies selling smartphones, computers, and tablets out there, but Apple's the premium brand that's doing so with margin-pumping markups. Isn't that what respect is ultimately all about?
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The article Respectfully Yours, Apple originally appeared on Fool.com.The Motley Fool owns shares of Amazon.com, IBM, Apple, and Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway, Amazon.com, and Apple, creating a bull call spread position in Apple, and creating a synthetic long position in IBM. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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