Exclusive: Whitney Tilson On Why Samsung Is A Better Investment Than Apple
Tilson sees Apple's high profit margins as a risk because the company is required to continuously innovate and create new “must-have products” to defend its high margins.
He believes that investors shouldn't count on it.
Tilson expressed a lack of confidence in Apple's management team to continue innovating, as Apple's innovation problem began after the passing of Steve Jobs.
Rather than investing in Apple, Tilson recently initiated a small position in Samsung.
“Samsung is operating on half the margins of Apple, and that made some people think it is an inferior business,” Tilson explained, pointing out that Samsung's stock is trading at around three times EBITDA, seven times earnings and drowning in cash, which helps support Samsung's margins.
“Apple's stock is moderately priced, even I'd say a little on the cheap side, but Samsung is the cheapest high quality global big stock I am aware of.
"It is just insanely cheap," emphasized Tilson.
Check out the video below for a full recap of Whitney Tilson's interview:
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