Jeff Gundlach: Apple is Broken, Over-Owned Stock

Jeff Gundlach, founder of Doubleline Capital, appeared on CNBC Wednesday evening to give his take on Apple AAPL. Gundlach specializes in bonds, but his bearish Apple call has gotten him a lot of coverage. Gundlach recommended that investors short Apple last spring when it was trading near $600. In his appearance Wednesday, Gundlach was as bearish as ever, calling Apple a “broken” stock that was “over-owned.” He reiterated his prediction that Apple would fall to $425. He said that he wouldn't consider Apple cheap until it was in the $300s. Gundlach refuted a number of the Apple bull arguments. Specifically, on Apple's low PE, Gundlach pointed to the company's large cash pile. Given that Apple's cash pile represented more than one-fifth of the company's value, it really shouldn't be a surprise that it trades at a low PE -- the multiple given to cash should be zero. In after-hours trading, Apple shares dropped nearly 10 percent, trading around $463. Apple closed at $514 on Wednesday.