Apple Inc (AAPL)

(Past Top Pick April 17, 2018, Up 25%) Their customers are fiercely loyal. Unnoticed is their internal semi-conductor development as well as their ability to combine hardware and software. (Also a top pick.)

Terrific long-term. Their eco-system is very strong with loyal customers, and there's a transition from Android phones to iPhones. They have over $100-billion in cash overseas after debt. Most of that will boost the dividend and share buybacks. He disagrees that Apple is no longer innovative, like the A.I. on their phones. Surveys show that iPhones are popular with teens, who will likely stay with Apple when they become adults. (1.32% dividend yield, Analysts' price target: not given)

It his largest holding for clients and one of his largest holdings personally. When you leave your house the most important thing to have is not your wallet is your iPhone. He loves the company. Once people have their iPhone people don’t switch so he likes the fact that the company brings 70% of their revenues from this product and 90% of their income.

(Past Top Pick, June 14, 2017, Up 53%) He's excited about its long-term. Apple remains innovative, and that will continue in AI and VR. It's a huge revenue generator, so it increases dividends. Their service business is growing rapidly. Their computers continue to sell at a premium. He expects stock buybacks of $180 billion in the next three years, so EPS will continue to rise. Don't focus on the number of phones they sell each quarter.

For him to get a decent return for 7 years it would have to be a two trillion dollar company in that time. This would be an average return from the market. The law of large numbers and competitive numbers could get in their way.

A stock split would not impact the valuation in his opinion. It is an institutional darling and the top of its class.

Apple has gone parabolic, which suggests it’s vulnerable to a pullback. Usually see a runup into its fall event (September 10 this year), and then a selloff. Don’t get into it now, wait for tech seasonality in October.

(A Top Pick Aug 4/17, Up 45%) It is in his top 5. His model price is $243.96 or a 9.5% upside. Warren Buffet is buying a little more.

(A Top Pick Sep 20/17, Up 40%) He stuck with it. He thinks they are doing a lot of the right things. The subscription and services model has been a good model for them. There is an announcement coming in September which he thinks will be positive. They are returning money through buybacks and dividends.

He owned a lot of it after the recession, but now they have no unit growth. He's concerned about what would happen if unit volumes went negative. Product launches in September should benefit them, though. Also, they have a lot of runway to expand services (e.g. apps, streaming music).

Cash flow is incredible. Repatriated a ton of cash. Pretty fairly valued. Could continue to run up to $250-60. Happy to own at these levels. Still a good buy here.

The caller has a large profit in Apple and is considering selling half his position. Hurst commented that he loves the strategy of de-risking. Then he commented on the high quality of Apple’s performance. It is delivering in technological development, growth of revenue stream, stock buybacks, dividends, etc. He also thinks that the market has not yet appreciated the potential of Apple’s augmented reality technology, which is just in its infancy today. So, even though he would de-risk a position that had grown large because of a big profit, he would not exit Apple and sees strong reasons to continue to invest in it.

Covered call selling DEC 210 calls. First company to reach the trillion-dollar market cap. He really likes this company. They are kicking on all cylinders. A cash hoard that is staggering.

This is a great company but its business has evolved. Its penetration in developed markets is very high and so its sales are replacement cycle. In less-developed markets, the phone is so expensive that it is difficult to increase penetration. The company has a lot of cash, but it is not using it. In addition, the company has grown so quickly over the last few years that continuing the momentum will be a challenge. For someone who has owned this company for a while, he would recommend taking the cost basis off the table. He doesn’t expect this to have a huge correction, which is what he expects for Twitter, but he does expect Apple to become range-bound.

He puts it in the same boat as AMZN-Q. How long can it maintain that competitive dominance?