Apple (AAPL) stock just went bonkers over a recommendation just published in the FT by the old Legg Mason fund manager Bill Miller – he of the famous 15 year streak of beating the S&P 500. (Things didn't go so well for him after that) Pretty amazing that a guy completely out of the spotlight for a few years can move a stock like this but quite a move here in Apple. Miller says the stock is 50% undervalued for what it is worth.
In [Miller's] opinion, "Apple is much more like Nike, a consumer brand with great loyalty." It is a typically contrarian and optimistic view from the 63-year-old former military intelligence officer, who appears to be enjoying a second youth as stock picking comes back into fashion, rescuing a reputation as both one of the best and one of the worst investors of recent decades.
For instance, were Apple to keep all $137bn on its balance sheet and just put future free cash flow into the dividend, "that alone would put the stock up close to 50 per cent."
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund's holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog