Apple Inc (AAPL)

(A Top Pick Jun 05/18, Down 7%) Slowing iPhone sales and there are concerns over consumer privacy with their products, but way safer than Facebook. He likes their cash holding and the dividend they pay. The membership service business is growing as well. He would buy on weakness.

It is so ingrained in the consumer that is not going away. They have a massive amount of cash. The cash on their balance sheet is bigger than 25 countries’ GDP. Not expensive valuation if you take out the cash. You have to watch if they get too big and they can't grow. They are not there yet. Maybe in 10 years.

He regrets selling it 18 months ago. It's done amazingly well. He loves their hardware and they are switching to a services side, but he finds Apple products not easy to use. With the current pullback, yes, he might buy it. They're criticized for not makin acquisitions, but in fact they have been buying smaller companies. He doesn't understand why they never bought Netflix or Spotify--glaring errors--when they have so much cash. The Apple Watch is better than many think.

FANGs? None in the FANG space are good value right now. Amazon has a floor at $1650 and ceiling at $2125 -- with PE ratio of 60. Facebook has given a short term buy signal -- technical support around $187-$189 with 20-25% upside. Nvidia has hit close to full value near $180 -- he might be taking profit on this one soon. Apple had a lousy quarter, but it still beat earnings expectations. He would not touch it here. Google hit resistance the other day -- too expensive as well. Netflix has been up against resistance and unless it can break through he would not touch it. He would only consider Facebook and Amazon as holds or weak buys.

They have 1.3 billion global devices that they are leveraging to grow their services platform. They are buying back 25% of their shares here. That alone is good reason to buy the stock. Cheap at 15 times 2020 earnings. China is improving. Modeling 14% growth rate. (Analysts’ price target is $214.63)