Apple (NASDAQ:AAPL) CEO Steve Jobs' unexpected medical leave is bad news, especially given the fact that no expected return date was disclosed. 

However, many analysts think Apple will do just fine in Jobs' absence.


Below are the top 5 reasons.



1. COO Tim Cook will do a good job of running Apple's day-to-day operations. He did it before in 2009 and he can do it again in 2011. During his six-month tenure in 2009, Apple shares soared 60 percent versus the 23 percent gain of the NASDAQ Composite index.


Moreover, Apple has other talented senior executives, including Scott Forstall (senior vice president of iOS Software), Jonathan Ive (senior vice president of industrial design), and Phil Schiller (senior vice president of worldwide product marketing).


Sources: Robert W. Baird and UBS.



2. Steve Jobs' greatest strength is probably his genius in product design. If he retreats from the CEO position indefinitely, that's obviously a problem.


However, if Jobs were to be gone for less than one year, it shouldn't be too bad. 


Apple products are developed two years in advance, so Jobs already had plenty of input into products in the pipeline. Cook and company are more than capable of advancing these products and eventually monetizing them.


Plus, Jobs isn't going anywhere.  As stated in his email, he will still be involved in Apple's major strategic decisions.


Sources:  Jeffries and Wedbush.



3. Warren Buffett recommends buying companies that any idiot can run.  While an idiot probably can't run Apple, a reasonably capable executive can definitely do it for a while because of the 'easy' growth ahead.


iPad is still in the early stages of its product life cycle. Assuming it blooms similar to the way other Apple products did (there is little indication it won't), Apple stands to earn enormous profits.


The iPhone will be carried by Verizon soon. It's not too far-fetched to assume it will eventually be carried by every single provider in the U.S.  As the iPhone expands its reach, Apple can naturally reap the financial rewards. 


It doesn't take a genius to realize these 'easy' gains.


Source: David Einhorn



 4. Apple is in a ridiculously secure financial position.


Its margins are extremely high. In 2010, it generated free cash flow of $16.6 billion. Apple also holds an eye-popping $51 billion in cash and no debt.


It's hard to imagine a scenario that would get Apple in trouble financially.


One interesting point is that should Steve Jobs' involvement with Apple wane, the company may start paying dividends.


Source: Robert W. Baird and Jeffries.



5. Apple stocks are trading cheaply relative to the high quality of the company. It's trading at 17 times the estimated earnings of the 2011 calendar year. Net of cash, it's 14.2 times the estimated earnings of 2011 fiscal year.


It's not uncommon for premium companies to trade as high as 80-times their earnings. So at current prices, investors aren't exactly paying for Steve Jobs' health. 


Sources: Robert W. Baird and David Einhorn