Once in a Lifetime Opportunity to Buy Apple?
Many investors can't sell Apple fast enough, but Joe Terranova and Doug Kass both think selling is absolutely the wrong trade.
Shares of Apple have tumbled almost 20% in the past month, with skeptics worried that the stock's market cap just got too big for its own good.
"No matter how bullish a story, you need new buyers of the stock each and every day, or it will go down. Simply put: Apple has run out of them," said Enis Taner of RiskReversal.com
Maybe not.
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE | VOLUME |
|---|---|---|---|---|---|---|
| AAPL | Apple Inc | AAPL | 189.98 | +3.10 | +1.66% | 34,052,465 |
On Friday's Halftime Report trader Joe Terranova, chief market strategist for Virtus, told us he hit the buy button as did famed market timer Doug Kass, president of Seabreeze Partners.
These pros believe Apple's decline presents opportunity.
In fact, they both think it may be the opportunity of a lifetime.
Kass thinks the decline has to do with an unusual situation involving hedge funds – more than anything else.
"There's chatter that several hedge funds were over their skis in Apple," Kass said. "I know a number of hedge funds that have in excess of a 15% weighting."
When the stock turned lower, they sold quickly.
"It's been acting as ATM for hedge funds – a good way to raise cash."
However both Kass, Terranova and analyst Brian White of Topeka all say the fundamentals have not changed. Demand for the company's gadgets remains white hot and Apple continues to gain market share.
"It's not just a growth company – it's grown 82% a year for the past 8 years," said White.
Yet because of the decline, "Apple is selling at 7 times ex-cash ," which all the pros say is simply too cheap.
"This sell-off is completely unwarranted and shocking," said White. Eventually all these pros expect fundamentals to prevail. "At $525 the risk reward is overwhelmingly positive," White added.
"I see the decline in Apple as similar to the decline in the market back in 2009," explained Terranova. "That was the buying opportunity of a generation for S&P and this is the buying opportunity of a generation for Apple."
It's worth noting that trader Steve Grasso, director of institutional sales trading at Stuart Frankel, remained skeptical even as shares turned higher in afternoon trade on Friday.
"I would not be buying," he said. "I think Apple reverses gains and trades even lower – if you're even thinking about hitting the buy button, wait a couple days to see if the stock confirms its turn higher."
* Doug Kass is also a contributor to the Street.com, Jim Cramer's Real Money Pro web site
Posted by CNBC's Lee Brodie
______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.
Trader disclosure: On November 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long TJX; Joe Terranova is long AAPL; Joe Terranova is long SWN; Joe Terranova is long VZ; Joe Terranova is long XOM; Joe Terranova is long AAPL DEC 5/5 CALLS; Jon Najarian is long AAPL; Jon Najarian is long FB; Jon Najarian is long MSFT; Jon Najarian is long HRB; Jon Najarian is long INTU; Jon Najarian is long AMZN; Jon Najarian is long NKE; Jon Najarian is long GPS; Jon Najarian is long WYNN; Jon Najarian is long BYD; Jon Najarian is long VOD; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long STSI; Jon Najarian is long GLUU; Simon Baker is funds long WFC; Simon Baker is funds long QCOM; Simon Baker is funds long HD; Simon Baker is funds long GOOG; Simon Baker is funds long GS; Simon Baker is funds long CSCO; Simon Baker is funds long AAPL; Simon Baker is funds long XLY; Steve Grasso is long ACI; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long BTU; Steve Grasso is long CLF; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN
CNBC.com with wires.