5 Best Long-Term Stocks To Buy Now

3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 128

Apple Inc. (NASDAQ:AAPL) is a high-margin and cash-rich business that has the ability to drive long-term shareholder value. The company has free cash flows of more than $107 billion and its strong pricing power allows it to sustain and grow its margins. The company has a trailing twelve-month operating margin of 30.5%. Over the past ten years, Apple Inc. (NASDAQ:AAPL) has gained 21.75% while the S&P 500 has gained 12%.

Wall Street analysts are positive about the company’s outlook. On September 20, Evercore ISI analyst Amit Daryanani raised his price target on Apple Inc. (NASDAQ:AAPL) to $190 from $185 and maintained an Outperform rating on the shares. On September 28, KeyBanc analyst Brandon Nispel reiterated his buy-side Overweight rating and $185 price target on Apple Inc.

At the end of the second quarter of 2022, 128 hedge funds disclosed ownership of stakes in Apple Inc. (NASDAQ:AAPL). These funds held collective stakes of $143 billion in the company. As of June 30, Warren Buffett’s Berkshire Hathaway is the leading investor in Apple Inc. (NASDAQ:AAPL) and has stakes worth $122 billion in the company.

Here is what Distillate Capital Partners LLC had to say about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2022 investor letter:

“Apple was largest new purchase in the quarter, at a 2% weight. Apple underperformed the overall market last quarter, and given very minimal debt, this price weakness translated into a commensurate fall in its enterprise value. For stocks with higher debt levels, it takes a disproportionately bigger market cap drop to achieve the same valuation improvement and this is a key reason we avoid highly leveraged names where significant price weakness can be experienced during a revaluation process. Alongside this decline in EV for Apple, its estimated free cash flows have risen steadily throughout the year. This contrast between a falling enterprise value and rising free cash flow, which is highlighted in Figure 12, made the stock sufficiently better valued such that it entered the portfolio. While Apple’s valuation is now attractive enough to warrant inclusion in the portfolio, it still ranks in the bottom quartile of the portfolio’s holdings and so the stock’s initiating weight is capped at a 2%. This contrasts significantly with Apple’s near-7% position in the S&P 500 benchmark, and reflects both our preference to avoid too much concentration risk as well our goal of ensuring that the overall portfolio valuation is as attractive as possible while balancing characteristics of stability and low indebtedness.”