As of this writing, Apple stock is down 28% from its 52 week high. Traders are running scared over concerns ranging from iPhone sales to the Chinese economy. Apple (NASDAQ:AAPL) huge size and scale probably leaves investors wondering how long it can grow. However, after taking a close look at Apple, it’s difficult to see anything negative about the company outside of market sentiment. Let’s examine.

flickr

Strives to Differentiate

Apple understands that it’s a technology company. More importantly, Apple understands the pluses and minuses of being a tech company. Tech companies can enjoy a tremendous amount of growth until product obsolescence sets in. Also, product differentiation can prove difficult for tech companies. At the most basic level a computer is a computer. Apple understands all of these aspects of its industry.

Apple tries to differentiate itself with aesthetically designed computers, phones, tablets, etc. Going way back, Apple famously set itself apart by not being IBM (NYSE:IBM) compatible. Apple maintains its own operating system. Also, in more recent years, Apple’s “ecosystem”, complete with its own app store, videos, music services, etc., serves as a way to immerse the consumer in its products.

Market leadership

Apple resides in a position of market leadership. In 2015, Apple was in the No. 1 spot in Interbrand’s list of brand rankings. It ranks No. 5 in the global computer hardware market, according to the Bloomberg Leaderboard. Apple also ranks No. 1 in terms of U.S. Smartphone Subscriber Market share, according to comScore. This kind of ubiquity strengthens Apple’s brand and public awareness. This certainly makes it easier for Apple to grow into new territories and move products.

Excellent fundamentals

Apple has one of the best financials I have ever seen. Over the past five years, its revenue, net income and free cash grew at an impressive CAGR of 30.3%, 30.7%, and 33.5% respectively. Apple’s balance sheet is the stuff of legend. In the most recent quarter, Apple’s cash balance came in at $21.1 billion with another $184.5 billion in investments (see table below). This adds up to an incredible $205.7 billion in cash and investments representing an incredible 172% of stockholder’s equity. Moreover, Apple keeps its long-term debt levels at around a reasonable 45% of stockholder’s equity.