Apple Inc (AAPL)

The valuation is not expensive. He loves it from that perspective. The Samsung 8 is getting great reviews and that is putting pressure on AAPL-Q. In a correction it could come back to $120 and would be more attractive there. Wait for the next iPhone to come out.

(A Top Pick, May 5/16. Up 54%.) Had felt this was very cheap on a valuation basis. Trading at almost 10X earnings and has a great dividend yield. Still a very cheap tech stock.

(A Top Pick May 3/16. Up 52%.) Feels the upgrade cycle is going to be a big cycle. They are building their service business really well. Trading at reasonable valuations. It is a big, big weight in the index, and there is a lot of money going into index funds, which is a positive. A very, very innovative company.

This has been in the middle of a great run. The tendency is for this to run up into a large product cycle, which is coming via the new iPhone. In the short term, it is probably a little overbought. He likes the Tech space as a whole. This company continues to dominate with its products. Would prefer to see it pull back to their moving average of $132-$135.

Apple (AAPL-Q) or Alphabet (GOOGL-Q)? He owns both, and both are great holdings. The amazing thing about this one is that they have about 1 billion basically captive users of their products. What makes that even more impressive is that there is a 93% loyalty rate. They produce a ton of cash. A 3^rd of their market cap is in cash. Trading well below the market multiple. A great core holding for any portfolio.

Although the stock has gone up considerably over 3-4 years, it is still not expensive, because the earnings growth has been there. Where can you buy a company that is trading at 15-16 times with the amount of cash on hand and this kind of a balance sheet. Dividend yield of 1.6%. (Analysts’ price target is $145.)

Companies go through cycles, and this one is on the downside of a cycle. ROC peaked in 2012, and ROC has been going down since that time. It is still at 15%, which is very respectable. Many companies would kill to have a 15% ROC. Valuation is OK, but doesn’t jump out as being super cheap. There are alternatives that you should be in. He would prefer something like Microsoft (MSFT-Q), Amazon (AMZN-Q), Facebook (FB-Q) or Google (GOOGL-Q). You aren’t going to get killed in this, but when there are alternatives that look so much more exciting, he would go with those.

An excellent company and the street thinks so as well. The Bear case on this is that 60% of its earnings is the iPhone, and what are they going to do next that is a real mover. The whole ecosystem is so powerful that if you own one Apple product, you own a bunch of them.

Partial Sell to buy Facebook (FB-Q)? He hasn’t done a lot of research on Facebook, so can’t give an opinion, but the valuation is not extreme and it is generating gobs of cash. However, Apple is cheaper and is doing great things.

This was a great win for him for 8-9 years. Has been out of the name for about 2 years. He has always been a big believer in their eco-system, but is really confused by why they haven’t bought some of their competition.

(Market Call Minute.) A great company, but it is coming up to an unsustainable earnings level and their margins are going to be under pressure in the future.

(Market Call Minute) It has done well, but don’t chase it.

(Top Pick Jan 5/16, Up 35.29%) He still likes the stock. If you take out all the cash they are trading at 9 or 10 times earnings.

Apple (AAPL-Q) or Alphabet (GOOGL-Q)? He owns both, although he has a bigger position in Google and thinks of it as a better business.

He likes this. Over the last 4-5 months, iPhone 7 was not as bad as he had expected, and also the services side of the business is growing faster than he had thought it would. Also, that is in the context of a not very robust economy. Looking at the product cycle coming, some of the big improvements they’ve made in their laptop and the Mac business and its low valuation, he covered his Short position and is now Long.