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Dheeraj Grover
Dheeraj Grover
Articles (493) 

GAMCO's Haverty: Apple is a Cash Machine

January 27, 2013 | About:

GAMCO's portfolio manager, Larry Haverty was on Bloomberg to discuss his views on Apple (AAPL). He thinks Apple is a cash generating machine and is priced very attractively at its current level after the big decline in stock price after the earnings release

-- Apple is one of GAMCO funds' very big holdings.

-- Apple stock at $460 is very cheap for a company that earns 70% in its operating assets.

-- Projected revenue increase of 7% is not a bad rate of growth as compared to other consumer product. companies and putting into perspective that new products will be coming, this is a trough in revenue growth.

-- Cash generation is just astounding at this company. Cash grew by $9 billion in the last quarter. Cash is now $137 billion and return on equity is around 33% with cash earning nothing which is 3x average American Corp. and sells at 6x cash flow, at 16% FCF yield. These are just too low of a valuation for the astounding cash generation that Apple has.

-- Apple should think about repurchasing shares at this price. It is 16% return and next year will be 25%

-- Lawrence will prefer buying Apple at these levels for his personal portfolio

Credit and Source: www.bloomberg.com, Bloomberg TV

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: 4.0/5 (4 votes)

Comments

vgm
Vgm - 3 years ago
A bit of common sense being talked on Apple for a change!

Thanks for posting.

Please leave your comment:


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