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:
-- 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:
