Why Does Mark Spellman Suddenly Love Apple?

  Google+  Twitter | + More Articles
  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

Mark Spellman’s Value Line Income and Growth Fund does not have a history of adding Apple (NASDAQ:AAPL) to its portfolio, but the money manager’s attitude toward the iPhone maker is taking a turn for the positive. Spellman, whose fund returned 10.6 percent last year, told Barron’s in an interview that he was putting a $720 price target on Apple’s stock and adding the shares to his fund.

“[Apple is] a stock that reported $44 and change in earnings,” Spellman said. “I don’t think the earnings are going to be less than $45 in the next year, and I don’t think that you get less than a 10 times multiple on that, so the downside of Apple shares is reasonable, at $450. But if things go right, I still see upside is closer to $50-$51 in earnings, so I’m using a $720 price target. That’s a stock that we’ve been adding to recently, and it’s not a name that has historically been in the fund.”

Should you buy or sell Apple’s stock ahead of earnings this month? Our 20-page proprietary analysis will help you save time and make money. Click here to get your SPECIAL REPORT now.

Spellman said his fund looked for companies with strong a free cash flow that would give them the flexibility to raise dividends, buy back stock, or make accretive acquisitions. The Value Line Income and Growth Fund has a four-star rating from Morningstar and has outperformed its moderate allocation peers for the past five- and 10-year periods, Barron’s said.

Save time and make money with our LOWEST ADVERTISED PRICE EVER to help you achieve your financial goals in 2013. This is a LIMITED TIME OFFER, so get your Stock Picker Newsletter now!

The money manager is also optimistic about Google (NASDAQ:GOOG) because the search company continues to “absolutely dominate the online advertising industry” despite several predictions to the contrary. “It continues to be a terrific way to play online advertising, and the growth in that is going to be, say, 20 percent to 30 percent a year for the foreseeable future,” Spellman said. “There is Google Wallet, and a lot of their other efforts, which could pan out as well.”

Don’t Miss: Is Intel Planning Apple’s Mac Update?

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business