Apple (AAPL) shares have dropped six percent so far in 2016 as the crowd of skeptics surrounding the once-unstoppable stock has grown larger. Eric Lynch, managing director at Scharf Investments, said the reason to own Apple is not Tim Cook's emerging market trips, but its cheap valuation. 'You are talking about a 13 percent free cash flow yield for a platform company that should have a good replacement rate going forward,' said Lynch. Lynch helps direct the Scharf Fund (LOGIX), which is up one percent so far in 2016, according to Morningstar. The $564 million fund has returned an average of 10.7 percent annually over the past three years, outpacing 95 percent of its peers in Morningstar's large-cap blend category. Lynch is also positive on Canadian Pacific (CP) , up one percent year-to-date, saying the railroad operator's stock has plenty of room to run despite the demise of its deal to merge with Norfolk Southern (NSC) . Furthermore, he said the railroad's stock has dropped due to the collapse in the energy sector, but in his view that relationship is overstated. 'It's a stock that is down in sympathy with energy declines, but it is not really an energy direct correlation,' said Lynch.
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