I used to be a notorious Apple (Nasdaq: AAPL) hater. From the roll out of the first overpriced iPhone, I’d look for any opportunity to rile up the fan boys. I’d yell at the television when they’d show file footage of the legions of fans standing in line at the Manhattan Apple store. I wrote bear cases for the stock. 

That was then. This is now. I’ve grown up and so has Apple. And I believe it should be a core holding in your equity portfolio.

#-ad_banner-#​Apple Is A Huge Bargain At Current Prices
Simply defined, a stock’s margin of safety is the difference between the intrinsic value of a stock and its market price. For example, if you determine that a stock’s intrinsic value is $10 per share and your purchase price is $7 per share, you’re getting $3 worth of upside and enough cushion if the intrinsic value of the stock winds up being $9.

This valuation method was pioneered by Warren Buffett’s mentor, Benjamin Graham; the godfather of securities analysis. The concept of margin of safety is the foundation of Berkshire Hathaway’s (NYSE: BRK-A) investment process. AAPL would totally fall under their screen these days.

Forget about the gadgets the company makes. Well, at least for a second. The REAL story behind Apple is in the numbers mainly the ones that many are missing altogether.

Depending on how you do the math, Apple’s intrinsic value is somewhere around $138 a share. Shares are currently bouncing around $94-95. That leaves a cushion of about $44 to $43. The stock would need to move 46% to get there. That might seem like a tall order under current market conditions — that is, what with the global stock markets falling out of bed, mainly due to concerns about the Chinese economic slowdown.Plus, Apple is highly dependent on the Chinese market for continued growth. That matters — but not as much as you would think. But let’s get back to the numbers.

Apple currently has around $215 billion in cash (and cash equivalents) which comes out to approximately $39 per share in cash. It seems that the market is disregarding the fact that in buying a share of Apple at around $95ish, you’re getting the cash on the balance sheet for free. So, when the market realizes this mispricing, there will only be a $4 gap between the market value and the intrinsic value of the stock.

Apple Still Has Room To Grow In China
So why is Apple’s share price under so much pressure? It’s often said that markets are ruled by fear and greed. In Apple’s case, it’s fear mainly over the company’s growth in China. 

The sales to greater China, which includes mainland China, Taiwan and Hong King, slowed dramatically. From 2013-2014, sales in the region grew from $9.5 billion to $16.1 billion on a year over year basis; a breakneck sales growth rates of 70%. However, the pace for 2014-2015 slowed to just a 13% growth rate; $16.1 billion to $18.7 billion. Granted, an 81% slowdown is a healthy whack. But, mid-teens growth in a huge, evolving economy that is currently experiencing significant disruption due to currency volatility isn’t that bad..

Apple’s position as a dominant, global consumer brand should benefit as the China continues the evolution from an export-driven economy to a consumption economy. After the company nearly doubled their penetration into that market, consistent, double digit growth is highly doable for a company with the marketing smarts Apple has. 

On the domestic front, concerns mount on the company losing its “wow mojo”. Sales of the Apple Watch have been underwhelming. iPad sales saw a 21% year-over-year sales decline 2014-2015 and observers are still unsure of what the company’s plan is for TV and streaming content. But with $215 billion in cash and the ability to grow at a rate faster than the U.S. economy (for now), Apple has time to figure it out.

And don’t forget, the company still has many bright spots, Year-over-year, the services segment of the business, which includes the App store, iTunes, Apple Pay and other lines, grew at a staggering 61% rate while iPhone shipments to India, a big, vibrant and somewhat overlooked emerging market grew at 76% clip.

When discussing Coca Cola (NYSE: KO), Warren Buffett has been quoting as saying “A ham sandwich could run Coca Cola.” This wasn’t a slight directed at the CEO. It was a statement describing the steady, predictability of the company’s ability to perform consistently — which is why it’s a core, bedrock holding in Buffett’s portfolio.

Apple CEO Tim Cook is no ham sandwich. He’s also no Steve Jobs but that’s NOT a bad thing. The whiz-bang era for Apple may be over in some aspects, but the trade-off is a new era where the company becomes a mature, consistent, industrial stalwart which in turn makes the stock a long time core holding for investors.

Risks to Consider: Apple’s growth overseas, mainly in China, is the biggest risk factor facing its core business. The Chinese economy is on tenterhooks as it deals with falling financial markets and currency turmoil. Much of this economic disruption stems from the Chinese economy transitioning from an export-driven to a consumption-based economy. While a transition that large is rarely seamless, it should benefit Apple as more Chinese consumers aspire to buy big name brands. The internal risk I worry about most is, as with any company, the ability to execute. Many critics claim Apple has lost its innovative edge since the passing of Steve Jobs. Maybe. However, Tim Cook is a hell of a good administrator. The company is still one of the best branders and marketers in the history of American business, and the mountain of cash back in Cupertino gives Apple plenty of dry powder to create and acquire intelligently.

Action To Take: The stock currently trades around $95 with a forward PE of 10.5 and a solid dividend yield of 2.17%. Every share of Apple comes with $39 per share in cash that the market may not be recognizing. Throw in other strong metrics like the company’s five year average return on equity (ROE) of 39% and free cash flow of around $12.50 per share and the stock is an even more compelling bargain.

Apple shares should be a core holding for long term, moderate investors. On a near term basis for traders, though, I expect the stock to reach a 12 month price target of $120, which would be driven by an extremely moderate PE expansion to 13, a 13% discount to the forward PE for the S&P 500. Adding in the dividends you’d collect in that time, and that’s a total return in excess of 28%. Not bad in a slow growth environment.

Editor’s Note: Have you seen our list of The 10 Most Shockingly Profitable Predictions For 2016? Our previous predictions have given investors annual returns as high as 310%. And this year’s group might still be our biggest money-makers yet. To hear the full list of predictions, including how to profit from Google’s shocking new business venture, click here.

Disclosure: Adam Fischbaum owns shares of AAPL