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GAMCO's Larry Haverty : Apple is Extremely Cheap

January 01, 2013 | About:
Dheeraj Grover

Dheeraj Grover

18 followers
GAMCO's portfolio manager, Larry Haverty was on Bloomberg to discuss his views on Apple (AAPL). He thinks Apple is an incredible value at its current levels. Apple closed at $532 Friday.

-- Trades at 6x current cash flow plus they have $121 Billion in cash which is going to $130 billion.

-- Stock buyback will be a great return for shareholders at this point.

-- While Apple is down, everyone knows the cash story, capital gains. People were sitting on $300 billion in capital gains in 2011 alone on this stock and they want to cash in before the capital gain taxes go high from 15% this year to normal income tax rate

-- Apple is the no.1 retailer in terms of profitability, has recurring revenue from iPhones and Apps, has planned obsolecense, has very high return on capital and very high profit margins.

-- Put all these financial characteristics and business characteristics along with a stock trading at half the multiple of Coke (KO), and you have an excellent opportunity for great return.

Credit and Source: Bloomberg

Here is the video:



About the author:

Dheeraj Grover
I am an individual investor with deep interest in the field of value investing. My ideas and thinking is inspired by highly respected value investors like Ben Graham, Warren Buffett, Walter Schloss, Bill Ruane and Tweedy Browne

Rating: 3.8/5 (5 votes)

Comments

BeFullyInformed
BeFullyInformed - 1 year ago
If he liked it at $532.00 he must love it at $453 where it is as of Feb 1 2013. Sometimes value is different for different investors. I firmly believe in using strategies that can profit and protect to benefit from stocks such as Apple Stock. While it might seem cheap, at one time RIM Stock (now BB stock) also seemed cheap. Instead of "loading up on shares" consider taking small positions either through put selling out of the money at lower strikes and wait for the stock to fall. For example a very simple moving averages trading strategy in Apple Stock would be perfect for handling the volatility, and continuing to profit from the position while offering some protection from a further collapse in valuation. No matter how cheap a stock is, it is often surprising how they can become even cheaper.

Teddi Knight fullyinformed.com

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