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Apple is a ‘no-brainer,’ even with it down more than 10% from its high: Cowen

Apple enters correction, should you buy?

Apple got banged up last week as it faced its worst losses in nearly two years. The stock officially fell into a correction, plunging more than 10 percent from its high just two weeks earlier.

But David Seaburg, head of sales and trading at Cowen, says Apple has not turned rotten. More than that, this pullback presents an opportunity to buy, he says.

"At these levels I think it's kind of a no-brainer," Seaburg told CNBC's "Trading Nation" on Friday.

Just look how much cash they have on hand, he said. As of the end of December, the world's largest company had $77.15 billion in cash and short-term investments. That number should grow once Apple delivers on its pledge to repatriate billions from outside the United States. Last year, the company said it had just over $252 billion in cash held overseas.

"You've got this sort of cash on hand that they could do something with. If they flex their muscle and start to return cash to shareholders or make some sort of meaningful acquisition, that could be transformative," said Seaburg. "The stock will be off to the races."

Larry McDonald, founder of the Bear Traps Report, also sees Apple as a buy, but not until its shares have suffered a little more.

"The capitulation process is about 70 percent complete," he said Friday on "Trading Nation." "You're going to get a spectacular opportunity to step in here and buy these fallen angels but you need a little bit more pain."

McDonald anticipates 10 or so more trading days in the red for Apple before he is ready to call it a buy.

On Friday, the stock slumped to its lowest levels since late October as the broader market suffered its worst day in more than a year. The Dow had its sixth-largest point decline ever with Apple its fourth-worst performer.

Apple was already lower earlier in Friday's session after two analyst firms cut their ratings following Thursday's earnings report. KeyBanc Capital Markets downgraded to sector weight from overweight, while Bernstein reduced it to market perform from outperform. Both firms pointed to slower iPhone demand as reason for their revision.

On Thursday evening, Apple reported a beat on its top and bottom lines for the first quarter but posted slowing growth in iPhone sales. It said it sold 77.3 million smartphones, down 1 percent year over year.

Growth should pick up in coming quarters, said Apple – the company anticipates 13 percent to 17 percent sales growth in its higher-priced iPhones this year.

Apple declined more than 4 percent on Friday in its worst one-day performance since April 2016. That is also the last time it had seen a weekly decline of more than 6 percent. Its shares entered correction territory on Friday, having dropped 11 percent from its 52-week high set two weeks earlier.

Apple turned higher in early trading Monday, recapturing a small portion of the losses sustained over Friday's session.