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Apple Rises on Report That It’s Undervalued: San Francisco Mover

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Feb. 6 (Bloomberg) -- Apple Inc. rallied in late-morning trading in New York on a report that cited Bill Miller, a fund manager at Legg Mason Inc., as saying that the shares are undervalued.

Apple rose as much as 1.9 percent to $466.50, reversing an earlier decline. The shares had climbed 0.8 percent to $461.70 as of 12:12 p.m., and through yesterday, declined 14 percent so far this year.

The maker of iPhones has lost about a third of its value since reaching a record on Sept. 19 amid investor concerns about slowing sales, narrowing profit margins and competition from Samsung Electronics Co. in a saturated smartphone market. Miller said Apple stock could be worth 50 percent more, according to the Financial Times, while some traders are also speculating that more cash will be returned to shareholders.

“The stock is undervalued, it’s ridiculous,” Brian White, an analyst at Topeka Capital Markets Inc., said in an interview.

Apple needs to offer some cash to entice value investors, White said.

“They need something that makes a statement to attract value investors,” he said.

Last year, Cook reinstated the company’s dividend, offering a payout for the first time since 1995. Apple’s indicated dividend yield has climbed to 2.3 percent as the stock has fallen, according to data compiled by Bloomberg.

Peter Oppenheimer, Apple’s chief financial officer, said on the company’s recent earnings conference call on Jan. 23 that management was considering increasing cash returns to shareholders.

To contact the reporter on this story: Karl Baker in New York at kbaker30@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net