Fund Manager: Here’s Why I’m Buying Apple

“It was certainly ripe for some profit taking,” Rolfe said. “But the market is now pricing in a bear market of Apple’s fundamentals, which just isn’t the case. If you assume margins hold steady and the company maintains a single-digit growth rate, the fair value of the stock is still $750.”

Rolfe told Barron’s at the end of last month that Apple’s stock was trading as if it may increase revenue only 3 percent or 4 percent per year, rather than the 22 percent modeled for this year. In addition, the consensus Wall Street estimate is now as close to Apple’s hyper-conservative guidance as it has ever been, which raises the possibility of Apple beating estimates when it next reports earnings next week.

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And according to Rolfe, his fund wasn’t the only one to add to its position at the bargain price of around $500. In the September quarter, Wedgewood ranked only 67th in percentage of fund holdings invested in Apple.

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