Using the new Stock Comparison Table, a Premium feature of GuruFocus, users can compare the financial strength and profitability metrics for several companies in one table. For example, users can take the business quality metrics for Apple Inc. (AAPL, Financial), the top holding of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial), and compare them with BlackBerry Inc. (BB, Financial), the second-largest holding of Prem Watsa (Trades, Portfolio)’s Fairfax Financial Ltd. (TSX:FFH, Financial).
Guru background
Known as the “Oracle of Omaha,” Buffett studied under Benjamin Graham at Columbia University during the 1950s. His insurance conglomerate seeks to invest in companies using a four-criterion approach: understandable business, favorable growth prospects, shareholder-friendly management and attractive valuations.
As of June 2021, Buffett’s $293.02 billion equity portfolio has a 41.46% weight in Apple Inc. (AAPL, Financial), its largest holding.
After meeting Francis Chou (Trades, Portfolio) in 1985, Watsa learned that Buffett made money using insurance float. Using a similar approach, Fairfax emphasizes a conservative value investment philosophy, seeking to invest assets on a total-return basis.
As of June 2021, Fairfax’s $3.11 billion equity portfolio has an 18.37% weight in BlackBerry (BB, Financial), its second-largest holding.
Company background
Apple, the Cupertino, California-based tech giant, designs and manufactures a wide range of consumer electronic products like the iPhone, Apple Watch and the Mac and provides services like Apple Music and iCloud.
Likewise, BlackBerry started as a smartphone manufacturer, yet primarily now focuses on cybersecurity and internet of things software products.
New GuruFocus Stock Comparison Table allows users to do comparative analysis side by side
As Figure 1 illustrates, users can open the Stock Comparison Table by clicking the “Stock Comparison Table” item under the GuruFocus Tools tab. Figure 2 illustrates a sample blank comparison table.
Figure 1
Figure 2
Users can add stocks to the table using the “Add Ticker” field. The user can also load a portfolio from “My Portfolios” or a saved table by clicking the “Open” button. Figure 3 illustrates a sample table with Apple and BlackBerry along with a few valuation metrics. The valuation metrics can be added by clicking “Valuation” under the GuruFocus Views tab.
Figure 3
Users can add metrics to the table using the “Add Metrics” field. The table supports current analysis and historical analysis. For example, one can add the “Price-to-GF Value” field, which computes the ratio between a company’s share price and its valuation based on GuruFocus’ exclusive valuation method. Figure 4 illustrates the table with the Price-to-GF Value field added.
Figure 4
As Figure 4 illustrates, Apple and BlackBerry are both significantly overvalued based on Friday’s price-to-GF Value ratio, although Apple is slightly less overvalued at 1.33 times GF Value.
Financial strength comparison
According to the stock summary page, key financial strength metrics include the cash-to-debt ratio, the debt-to-equity ratio, interest coverage ratio and the Altman Z-score. Figure 5 illustrates the table with the financial strength metrics added.
Figure 5
Users can save the table by clicking either the “Save” or “Save As” items underneath the “Save” tab. Figure 6 illustrates this, in which we name the table as “Financial Strength and Valuation.”
Figure 6
As Figure 5 illustrates, Apple’s financial strength ranks slightly better than that of BlackBerry’s. Even though Apple’s cash-to-debt ratio is lower than BlackBerry’s, Apple has a higher interest coverage ratio and a higher Altman Z-score.
GuruFocus ranks Apple’s financial strength 5 out of 10 on the back of debt-to-equity ratios underperforming more than 95% of global competitors despite the company having a strong Altman Z-score of 7.45 and an interest coverage ratio that tops more than 61% of global hardware companies.
Profitability comparison
Since key profitability metrics involve trends in a company’s profit margins and revenue growth, users can compare profitability metrics using the “Historical Analysis” section of the comparison table, as Figure 7 illustrates.
Figure 7
Users can sort the table by the “Metrics” column to group the metrics separately. Also, users can open the “Browse” button to search for a specific metric from the financials term pages. Users can also export the table to Excel using the “Export to Excel” item under the Export tab.
The Frequency button allows the user to display quarterly, annual or trailing-12-month data in the comparison table when scrolling to the right. Figure 8 shows a sample screen shot for the historical data.
Figure 8
As Figure 7 illustrates, Apple had positive revenue growth rates over the past three, five and 10 years, while BlackBerry’s revenues have declined on average. Despite this, BlackBerry had positive gross and operating margins, while Apple’s margins have slightly declined on average.
GuruFocus ranks Apple’s profitability 8 out of 10 on the back of a high Piotroski F-score of 7 and an operating margin that outperforms more than 96% of global competitors despite declining approximately 4.3% per year on average over the past five years.
On the other hand, GuruFocus ranks BlackBerry’s profitability 2 out of 10 on the back of profit margins and returns underperforming more than 78% of global competitors.
Conclusions
While the stock comparison table suggests that Apple has higher business quality than BlackBerry, several other risks and factors must be considered in order to determine which stock is the better investment. Investors must always do their own research before investing in the stock market.
