This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Apple Pullback Entices Fund Managers

Stocks in this article: AAPLGOOGRIMM

Apple comments from Kenjol Capital and McGervey Wealth Management added in this update.

BOSTON ( TheStreet) -- Apple (AAPL) shares are sliding after the tech giant posted record revenue and earnings, which several fund managers say is a buying opportunity even as the stock remains near its all-time high.

Among the highlights of Apple's fiscal fourth quarter report, the company saw revenue surge to $20.34 billion from $12.21 billion in the year ago quarter. Net profit climbed to $4.31 billion, or $4.64 a share, from year-ago earnings of $2.53 billion, or $2.77 billion. Apple said international sales accounted for 57% of revenue in the quarter.

Apple Store

Investors sold shares, though, as the gross margin of 36.9% was down from 41.8% in the year-ago period. And while Apple posted better-than-expected sales numbers for the Mac and iPhone, the company sold 4.2 million iPads, which was below Wall Street's target of 4.8 million.

Shares of Apple fell as low as $300.02 earlier in Tuesday's session and are lately down 3% to $308.68. The stock hit a record $319 on Monday ahead of the release of the fiscal fourth-quarter earnings report.

That pullback, though, has presented investors with a buying opportunity, several fund managers say. Herb Chen, portfolio manager of the Huntington Growth Fund based in Columbus, Ohio, says that "this is a great buying opportunity, and I would buy more."

"I consider Apple to be one of the most innovative technology firms and it is currently one of my largest holdings in the Huntington Growth Fund," Chen says. Apple represents a 6%, or $7.75 million, position in the Huntington Growth Fund (HGWIX).

Chen says that even though gross margins and iPad sales disappointed, he is a firm believer in Apple. "iPad expectations were sky high, iPad is just in its infancy, and iPad will dominate," he says. "Moreover, Apple's iPhone and Mac fourth quarter sales exceeded expectations. I am looking forward to see what happens during the holiday season."

Jim Meyer, chief investment officer at West Conshohocken, Pa.-based Tower Bridge Advisors, says investors are likely overreacting to the lower-than-expected sales number for the iPad device.

"The iPad number being light had nothing to do with lack of demand. It's just a function of getting a new product out the door with enough quantity," Meyer says. "If that's the worst problem you have, that's pretty good."

Meyer says that Tower Bridge, which has $850 million in assets under management, has allocated somewhere between $1 million and $10 million to Apple shares. He notes that Apple is still attractive but will face difficulty going forward due to the large market cap.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs