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Why I am Sticking with Apple Inc (AAPL) and Microsoft (MSFT): Fund Manager

Apple Inc (NASDAQ:AAPL) sure has its fair share of bears out there, but on the whole, many of the financial world’s big guns are still sticking to the tech company. One such bull was on Bloomberg this morning, Holland & Company Chairman Michael Holland. According to Holland’s official bio, he has quite the track record, holding chief executive posts at First Boston Asset Management, Salomon Brothers Asset Management, a “number of mutual funds,” and Blackstone Alternative Asset Management.

Apple Inc. (NASDAQ:AAPL)

As we can expect of many fund managers who currently hold large stakes in Apple Inc (NASDAQ:AAPL), Holland was quick to defend the company throughout its decline over the past two months, which has shaved roughly 20% off of the stock’s high of $705 a share. He had this to say about Apple:

“I’ve owned it at much lower prices, I’ve gone through these of disbelief from the market when they say ‘it’s now over.’ This goes back a number of years […] but that’s not a reason not to sell it […] it’s yielding 2%, it’s trading at less than 11 times earnings”

Holland goes on to say that “even if they didn’t have any great products in the future,” it’s hard to ignore the stock when it is this cheap. Essentially, the fund manager’s argument is strictly valuation based, which may be a faulty viewpoint according to some,  but in our opinion, it’s correct. For those who think ‘this time is different,’ and ‘Apple Inc (NASDAQ:AAPL) can’t be valued using traditional metrics,’ he’d be happy to take the stock off your hands.

But Apple wasn’t the only stock Holland discussed in his interview, as he also made time to mention Microsoft Corporation (NASDAQ:MSFT). When asked if the “growth picture” and “what’s happening in the executive ranks” is a concern to him, Holland said that he was a value bull on the tech company as well, mentioning that Apple Inc (NASDAQ:AAPL), Microsoft, and Google Inc (NASDAQ:GOOG) “have the possibility, with any of these companies, that they will strike it rich once again in the future.” Holland added that “Microsoft has no believers,” but that “fat yields” and “low valuation” should be a prime reason to buy.

It looks as though the financial world is at a crossroads, with many investors holding the likes of Apple and Microsoft because of valuation truisms, and their bearish counterparts believing that more pain is in store before it’s time to buy in. Which side of the fence do you fall on? Is AAPL a good play because of its valuation, or do you see no reason why the stock can’t be trading at an even lower valuation by the end of the year? Can the same be said about Microsoft?

Let us know your thoughts in the comments section below.

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