“My next long purchase will be Apple (AAPL), as the risk/reward ratio begins to move into positive territory,” Doug Kass writes for Real Money Pro via TheStreet.
“While Apple remains a trading sardine not an eating (or investing) sardine, in my view, over the next six to 12 months, downside is $400 to $410 a share and upside is likely $500 to $525 a share — though depending on the timing and context of new product release, this could be higher,” Kass writes. “While still elevated vis-a-vis my expectations, consensus sales and earnings expectations have been reduced dramatically and have now grown more realistic.”
Kass writes, “While it is generally recognized now that Apple’s profits will be relatively stable and show little growth over the next two to three years (likely between $35 and $45 a share), free cash flow generation will be meaningful and will support continued buybacks and dividend increases… The offshore tax issue has likely come and gone after this week’s testimony. (I give Tim Cook a split decision win over the Congressional questioners.) … Note: At around 10:57 a.m. EDT, Doug Kass bought Apple shares at $443.65.”
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