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Doug Kass is an Apple (NASDAQ:AAPL) buyer again. Kass, of Seabreeze Partners, wrote a note on Wednesday announcing it was time to go “Apple picking” and that the risk-reward scenario surrounding the company made its shares ripe for a trade.
“With an extreme move in investor sentiment, shares of Apple are turning more attractive on a risk/reward basis, though they probably still should be viewed as a trading sardine not an eating (or investing) sardine,” Kass wrote, according to Barron’s.
According to Kass, even though most earnings forecasts for the company were too high based on a more competitive business backdrop and that its margins were vulnerable, these fears had been discounted at current price levels. Apple fell more than 2 percent on Tuesday to close at $428.42. According to Kass, Apple’s grounding in its product markets was still firm and investors would start appreciating that fact as soon as the company was ready to announce new products.
“Despite the share price schmeissing, Apple’s stable of applications and products will remain a dominant factor in the markets it serves,” Kass wrote. “Investors’ disappointing reaction to the recent trends in the company’s product offerings might be transitory as the company begins to upgrade its portfolio and continues to innovate.”
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