Apple Inc. (NASDAQ:AAPL) stock is cheaper compared to the overall market, says activist investor Carl Icahn while Speaking to CNBC’s Fast Money Wednesday. “You don’t have to be a genius in technology to understand that Apple is selling at 2014 consensus of nine times earnings.” He added that the S&P is trading at 17 times earnings, and Apple stock is adding more value.
“It’s sort of amazing to me that it’s just not picked up,” the activist investor added.
Icahn tweets and Apple stocks gains
Carl Icahn holds a stake of over $3 billion in Apple Inc. (NASDAQ:AAPL). In a Twitter post, he wrote that he purchased $500 million more of Apple stock over last two weeks, and the investment has crossed the $3 billion mark. The Tweet from Icahn pushed Apple stock to as much as 1.3% on Wednesday.
Back in August 2013, Icahn posted on Twitter that he holds a large position in Apple. He also wrote that he talked to CEO Tim Cook, and will buy more of them in the future. Apple Inc. (NASDAQ:AAPL) stock increased to around 8.5% within a week of the tweet.
Others also support the view
John Stephenson of First Asset Investment Management also feels that investors should just grab the stock. John sees Apple as an extraordinary company and a long bet on mobile applications and mobile computing. Stephenson supports the view of Icahn that the stock is trading at cheap valuation. The stock is trading at 13.9 times trailing 12 months earnings as against industry average of nearly 19 times. In comparison, Google is trading at 31.6 times, according to Capital IQ data.
According to Stephenson, the recent deal of Apple Inc. (NASDAQ:AAPL) and China Mobile would pay off positively, in the future. He said that the deal would help Apple to add another $3 per share or $10 billion, in next 12 months.
“We haven’t started talking – until this China Mobile deal – about tapping the emerging markets,” says Stephenson. “That’s really where the potential future growth for them,” Stephenson said.
Separately, Chad Morganlander, portfolio manager and co-founder Washington Crossings Advisors has assigned a price target of $650 to Apple. The stock touched a high of $557 on Wednesday. The analyst said that investors would like to date Apple Inc. (NASDAQ:AAPL) but not marry it, which reflects the thought that the stock may perform well in the short run, but in the long run it may face some challenges.