Howard Ward, chief investment officer at Gamco Investors, explains why he thinks Apple is a great buying opportunity right now. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”
Apple is the largest holding in my fund. This is a company that’s going to earn about $42 billion dollars this year. That will make it #1 in terms of earnings in the U.S. Exxon will be #2 at about $35 billion. Exxon has 2.4 times the revenues of Apple and sells at 5X EBITDA. Apple sells at 4.4X EBITDA. Exxon’s top line and bottom line have been growing at about a 4% rate, Apple much higher… I think this [pullback] is comparable to buying JP Morgan last spring after they had the big trading loss and the stock was beaten up and it was at $30 a share and now it’s $50, but you have to go against the grain of public sentiment and buy these stocks when they have fallen from grace and this is a great buying opp… I think that next month, we’re going to get an announcement from the company as to how they intend to reallocate some of their cash and I think they will put a floor under the stock at a higher price that is is today.
Direct link to video here.