Apple shares may be down 20 percent year to date as investors worry about slowing growth, but two top performing fund managers with different strategies still see reason to own the smartphone maker.
"Given where the stock is priced ... a lot can go wrong before the stock appears overvalued," value fund manager Bill Nygren of Oakmark Fund told the Morningstar Conference in Chicago.
Growth manager Steve Wymer of Fidelity Investments agrees.
"The market is saying their position is going to decline rapidly," Wymer told the gathering Wednesday, pointing to the flameouts of Nokia and Motorola as examples of what the market may be worried will happen to Apple.
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But, he said, "the competition is not better than them, but they're good enough." The competition in this case is Samsung, HTC and other hardware makers that use the Google Android operating system.
That makes it important for Apple, which was the largest holding in the Fidelity Growth Company fund at the end of the first quarter, to maintain a strong ecosystem, Wymer said. To keep the ecosystem going, not only does Apple need great hardware that supports great software and apps, but they need to start to deliver great services, Wymer said.
Analysts are expecting more innovation around services, and this week Apple unveiled a new streaming radio service iTunes Radio. Apple analysts are also expecting other new services such as mobile payments down the road.
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The other key is managing a slowdown in growth. Wymer said he was surprised at how fast the smartphone business in the developed world has matured.
Both Wymer and Nygren said that capital allocation becomes much more important for Apple from here.
"As companies get into a more mature phase, capital allocation becomes important," Oakmark's Nygren said.
Wymer agreed, saying, "Those that throw money at a business to achieve growth rates that are no longer achievable can be a problem."
Returning capital to shareholders through dividends and stock buybacks is a risk reducer and can keep a company that's entering a slowing growth phase from chasing after growth by making bad acquisitions or investing unwisely, Nygren said.
While Apple isn't the largest holding in the Oakmark fund, Nygren has been building a position in the tech maker.
And with Apple embracing a dividend and stock buyback and continuing to expand its underlying business, both value and growth investors may be able to find something to like in the stock.
—By CNBC's Justin Menza. Follow him on Twitter @JustinMenza.
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