Apple Inc (AAPL)

It is a microcosm of the S&P 500. It has had a tendency of peaking out at 5.5 times its book value. It usually sinks back 15-20% of its trading value when it hits here. He expected this but this time it did not happen. AAPL-Q has been trying to push higher but every time it gets there it gets pushed down. One thing that is interesting is that if you look at the slope of the growth of AAPL-Q, It was growing aggressively until 2012 and then they started to buy back shares and the growth of the company slowed considerably. Most interesting is that the rate of earnings growth has also slowed down as it has for many other similar companies that have bought back stock. This move to buy back stock is damaging to shareholders. If the company is not reinvesting, the growth slows. They wasted shareholders' money with these buybacks. The ceiling is $161 right now. The book value will go down. If we ever get into a market correction then this stock will have a good one.

He likes it. Service revenues and other parts of the business are ticking up. It's a dominant brand, with a dominant phone. He wouldn't be surprised if the Apple Watch picked up its sales. They're great at executing the brand. It trades at only 13x earnings. They are gushing so much cash, too. A little concerned that this has run so far, so fast. But there is growth here.

He would continue to hold this stock as they are doing everything well. They announced a $100 million share buyback. They put up increased iPhone X sales figures and sees it as the gateway into new tech with augmented reality.

They have a massive amount of cash, repatriating a lot of it, and are doing a huge share buyback. They project strong growth in their services segment. Caveat: iPhones are still over 60% of what they make--how sustainable is this? Overall, you can do a lot worse than Apple. They've executed very well this past qurater. It won't hurt to own Apple.

There hasn’t been a lot of innovation lately. They have their hands in augmented reality. The services business is the really exciting part with $9 billion in revenues the last quarter with very high margins. iPhones margins still strong. (Analysts’ price target is $194.00)

The chart is showing a bit of weakness. Not a bad chart. It's been pausing recently, consolidating, or maybe still in its uptrend. All the FANGs will be range-bound in the summer and work out their excesses from their recent (overbought) runs. He's long-term bullish on Apple though.

There's a lot of negativity about Apple now. He loves their products, but his Apple and iCloud mail is buggy. The point is, a lot of Apple's user interfaces are dragging their heels--they aren't improving. They can't compete with Alexa, for
instance. He's thinking of switching to other (non-Apple) apps like Spotify. Not a fan of this stock.

(A Top Pick July 11/17 Up 15%) He still likes it although it struggles. His model price is coming down as people worry about future earnings. A new iPhone X is $1800 in Canada. He would not be a seller yet.

This is a great business. It often pays to hang on to a great business when the stock drops a little. Apple is transitioning from being a pure hardware business into more software services. This will take time and lead to more stable cash flow. Higher yields tend to drive multiples down. This is especially significant for tech stocks, because they have such high multiples at this time.

He would buy it here for the long term. Shipments from a Taiwan producer to Apple were rumoured to be lower, which has spooked the market at bit. He expects a bottom to the price pretty soon. He expects a dividend increase soon. It is at the 200 day moving average support as well.

High customer satisfaction rating. Solid balance sheet with a ton of net cash that it will return to shareholders over time. As people in emerging markets transition to faster phone systems, Apple with benefit. Apple users buy more stuff, basically. Apple can be a little volatile, but take advantage of that. (Analysts' price target $193.03)

Trim, if you hold a large position. The big risk is that Samsung or someone comes out with the next hot phone. He likes the company, but the iPhone IS Apple, a one-product company. That's risky. Will Apple come out with the next hot product that consumers will buy?

It has several issues. For example, he thinks Siri is terrible and Alexa is incredible instead; and Apple Music doesn't stand a chance against Spotify. What really bothers him is that they hold so much cash and they've let these developments happen. He used to be a raving fan of Apple, but he's lukewarm now. He hasn't given up hope, though.

IS Apple high Beta? It's 1.78 He doesn't think so. As one of FAANG, Apple has growth, value and pays dividends--basically everything you want. But can the iPhone be the growth engine forever, and if not, then what's the next
great product? Still has a good balance sheet, and repatriation of cash is happening. Short-term Apple looks good, but long-term is up for debate.

He thinks it has done well, but it is over-extended. If you have a position, watch out. There is a double-bottom that could be a problem if it is taken out. Consider a trailing stop about 10% below current prices.