In an interview with CNBC’s Scott Wapner, NYU finance professor and valuation expert Aswath Damodaran, who started accumulating Apple (AAPL)’s stock in 1997 at around $5 per share before selling it in April 2012 at $600, said Apple represents a value play and is worth much more than $450 per share.
“This is a company that’s being priced for no growth and compressed margins already, so I don’t understand why the market would react the way it does to news that is, in a sense, is not being built into the stock price,” he said.
Asked by the host why the stock is trading at $450 when it’s worth much more, Damodaran, who is a fan of intrinsic value investing, said that Apple’s pps decline was shaking out a certain type of investor.
“If you’re a value investor, a true value investor, you’ve got to invest when you’re not comfortable,” he said. “Right now, am I comfortable investing in Apple? Not really, but I will invest in it because that’s the time to get into a stock if you’re a value investor.
“I’m going to buy Apple as a business, and I think I’m getting a pretty good business for the price I’m paying.”
Damodaran added that he was not surprised that the stock remained in a holding pattern.
“I think that’s precisely reason now the time, if you’re a value investor, to think about buying the stock,” he said, adding that the market is overly focused on small details, not fundamentals.
Damodaran believes AAPL is worth $600 per share.