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S&P Capital IQ tech equity research head Scott Kessler explains why Apple is a strong buy despite its earnings miss.
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You very much.
Sour apple shares of the tech giant taken and nosedive now Scott Kessler with S&P capital IQ joins us Scott you put a -- on apple.
April 23 09 with a 124 dollars then you didn't even taken off what was -- 700 in September are you to take off your recommendation now.
Right well that's obviously would have condition -- -- we definitely should have looking back.
Taking the opportunity after the stock to run up so substantially.
Below that more measured given the risks that to some extent have come to fruition but the reality is.
We're talking now.
And as of now at.
406 dollars a share.
We think apple is by actually have a strong buy recommendation on the stock at this point a strong but when you put in the strong buy what level was that you know just November actually in mid November we forget actors are that I talk yeah.
And it actually is an incredibly cheap stock -- a price earnings multiple basis and for a lot of us shareholders were investors got shut out apple malice -- time to get back -- But the technical guys talk about.
Support levels and apple have this 505 dollar supportive fell through the next what is for sixty if it closes below 460 today.
-- and the going even farther down to 425 or 400.
-- I guess that's possible not technical analyst what we do it S&P capital IQ at least in terms of my department is really focus on fundamental analysis and as you point out.
You look at -- -- year 2013 estimates which we updated and actually revised downward last night.
Apple's trading at less than ten times earnings it's pretty astounding.
Yeah and did so they came in with 47 and a half million iPhone sales and a quarter now that that is just -- boat -- But it was 250 million is this an overreaction -- by so obviously think so yes we definitely think it's an over reaction of one point to bring out is look.
Growth is still -- apple if you look at the iPad you look at the iPhone you're talking about 42 I think 28% growth in the quarter.
Very very respectable just not the explosive growth -- people were expecting or frankly that they saw.
Even just a couple quarters ago when you're earning thirteen billion dollars in net income is still cornered kind of tough to have robust.
Growth on top of that still you get the feeling that.
This is not just numbers anymore this is a motion everyone fell in love of Apple's only 2% of the SMP tech group.
Ten years ago it's almost 20% now there is the love for apple now gonna divider divert away into other tech stocks is -- -- better by now.
Yet so I definitely agree with that sentiment that as apple has fallen that capital -- found other homes at least temporary homes we think.
We actually hold recommendation on cool we think that apple is really good place to be -- here's another factoid.
If you think about the December quarter up -- a 137.
Billion dollars in cash and investments that accounts for rate basically a third of the market cap itself.
People aren't even thinking about that -- -- -- Daniel I have to just sitting there you have it one last question if I mean it's falling today it's scary.
Would you tell your mom to -- -- right now would you tell your mom to wait a few weeks and see if it goes down even more.
Yeah while -- mom I do speak my mom occasionally and I will tell you that.
We have a strong buy recommendation on the stock and I would tell her to do what.
I'm telling everyone else to do which is by the stock can -- OK I tell my mom to wait a little bit I'm Tim.
Activity bit -- thank you very much for -- what -- Scott Kessler nice job sir.
-- led.
