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.
"I like Apple here. I think you can selectively add to Apple," Meyer says. "But if you're a long-term investor in Apple, you have to ask yourself what growth rate is sustainable. They'll continue to outperform, but the challenge is now that they're the second-largest company in market cap, only to Exxon Mobil ( XOM). Size becomes an ever-bigger handicap." Bryan Keane, equity analyst for the Alpine Mutual Funds, says investors need to take a step back and look at Apple's chart for 2010. "To me, there's still runway left for Apple," he says. "The earnings don't change our view of the stock. We'll continue to keep our holding, even with the pullback we're having today. The stock is still up nicely on the year. If you look at the most recent run, we're only pulling back to where it was a week ago. In August, the stock was $240." Like Huntington's Chen, Keane also says that Apple is at the beginning of the iPad ramp. "We saw similar things when the iPod started out," he says. "They only just launched the iPad in China, so I think you're going to see that
international revenue mix go higher and higher. You definitely want to look for those companies with the bigger international exposure." Keane says the market may be overreacting to the slide in Apple's margins. "Their gross margins, which everyone is disappointed about, the company guided to and actually did better," he says. "The thing is that they didn't beat by as much as they have in previous quarters." Keane notes that Apple CEO Steve Jobs, in his first appearance on an earnings conference call since 2008, took swings at rivals Google ( GOOG) and Research In Motion ( RIMM) by declaring the upcoming release of 7-inch tablets "dead on arrival." "Apple is a consumer products company and it's one of the best at innovating within its markets," Keane says. "To this point, they've been way ahead of the competition, from the iPod onto the iPhone. Now you do have some viable competition. It's going to be interesting going forward. They still have the superior product and the applications, but I also think Android has become a viable alternative." Channing Smith, portfolio manager of the Capital Advisors Growth Fund ( CIAOX), says that the current lack of competition in the space and an increasing distribution channel is key to Apple going forward. "If anything, this is an opportunity to build a position going into the holiday season, which we think is going to be dynamite," Smith says. "The trend is only going to accelerate for the iPad and the iPhone. All of these products continue to grow. Apple continues to deliver excellent results and we're starting to see the distribution channel set to explode."
Smith notes the same concerns over gross margins. "You'd expect to see gross margins disappoint with increased competition. The competition really hasn't shown up yet, " he says. "Apple is set up pretty well, especially from a distribution standpoint. We feel pretty good going into the holiday quarter, but this gross margin number is definitely a disappointment." That said, Smith says the fund would consider adding to its current position. Based in Tulsa, the Capital Advisors Growth Fund has 3.2% of its $21.2 million in net assets allocated to Apple. "There are a number of different growth avenues for Apple. It's a stock where the valuation is still fairly attractive," Smith adds. "We would definitely be adding to the position on a pullback." Mike McGervey, president of North Canton, Ohio-based McGervey Wealth Management, also says that he will continue to hold Apple shares after the earnings report. "Apple has consistently increased EPS growth annually over the last four years and the company's innovation has kept sales growing up over 60%," McGervey says. "We currently are long AAPL and will continue to hold as we see it's innovation, industry relative strength and earnings growth continuing to propel this companies price higher." While investors may take a short-term approach by dumping Apple shares, investors should be buying ahead of what is expected to be a huge holiday quarter, says Kenny Landgraf, president at Austin-based Kenjol Capital, a firm with more than $70 million in assets under management. "We may get profit selling after the news, but the 'Apple train' keeps rolling and will right into the holiday season where there will be a lot of 'Apples' under the Christmas tree," Landgraf says. -- Written by Robert Holmes in Boston. >To contact the writer of this article, click here: Robert Holmes. >To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet. >To submit a news tip, send an email to: email@example.com.