Tags: Cooperman | Apple | Icahn | undervalued

Leon Cooperman: Apple Shares 20 Percent Undervalued

By    |   Thursday, 09 October 2014 12:03 PM

Activist investor Carl Icahn isn't the only one who believes Apple's fair value lies far above present levels.

Leon Cooperman, the legendary founder of hedge fund firm Omega Advisors, says the company's shares are 20 percent undervalued. Apple traded at $101.67 Thursday midday.

"We bought [about 1.2 million shares] at much lower prices," he tells CNBC. "We like it. We still own it."

To be sure, "technology is a double edged sword," Cooperman contends. That's because today's new technology can soon become yesterday's old technology. "I think this company has to reinvest for the future and have new products."

Nonetheless, "there's nothing out there on the horizon nearly as profitable as the iPhone."

Icahn wrote in a letter to Apple Thursday that its stock is worth twice the current level and that the company should take advantage of this "undervaluation" to increase its planned share repurchases.

On that score, Cooperman notes, "How much leverage they should have and stock to buy back? . . . I'll let the management do the heavy lifting, and I'll go along with what they want to do."

Meanwhile, Morningstar analyst Brian Colello puts Apple's fair value at $93.

"Although Apple has a sterling brand, strong product pipeline, and ample opportunity to gain share in its various end markets, short product life cycles and intense competition will prevent the firm from resting on its laurels, or carving out a wide economic moat," he writes on Morningstar.com.

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Activist investor Carl Icahn isn't the only one who believes Apple's fair value lies far above present levels.
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2014-03-09
Thursday, 09 October 2014 12:03 PM
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