Apple Inc (AAPL)

In order for this to work well as an investment, historically it has been necessary for there to be a lot of pent-up demand for phones. Some of the subsequent launches of phones since iPhone 6, has been that not so many phones have been “end-of-life”. Thinks there has been a boost in the short term because of the difficulty that Samsung has been having. He wouldn’t expect volumes to be very strong on this. He would wait for more pent-up demand.

To him, this has sort of gone ex-growth, not growing as quickly. IPhone 7 is not substantially different, but was incrementally different. He likes the stock because it is cheap. They have lots of cash and can put it to work with a higher dividend. Their services business is growing quite rapidly, so he can see better numbers on that side. Dividend yield of 1.97%.

This is a great company. However, it has the law of big numbers working against it. In order to make any kind of significant move, it has to have stellar introductions and things really have to be on a large scale to get it to go. If he is right on his view of the market, then this stock will be going up.

iPhone 7 is not a big step up from iPhone 6. This is still a hardware selling consumer technology company, which condemns the multiple to not much more than the low teens. Still has a good balance sheet and a lot of money. They need to rejuvenate the growth by coming out with a new revolutionary product.

Owned this for a very long time, but started souring on it from a user perspective. Still loves their product. Every time he gets a new iPhone upgrade, it wasn’t as exciting as the last one. He finds their iTunes, iPhoto’s, all of that software and services used to be the easiest thing he had ever used, but now finds it the hardest. From a user perspective, they have some major work to do. Doesn’t understand why they haven’t snapped up things like Spotify, Netflix, etc. Probably one of the safest stocks out there right now.

Considers this as “yesterday’s stock”. The day Steve Jobs died, their creativity died as well. The company really hasn’t come up with anything new or exciting. It is more evolutionary than revolutionary. It has tons of cash and will probably raise its dividend.

He tells clients to find an exit. It is a great company but the return on capital peaked at 30%. It is down to 17% now. This is a material change. It is caused by competition. He sees it eroding over time. The iPhone 7 got a mediocre response.

A juggernaut. A name that is interesting and not expensive. There is always a lot of focus on product cycles and what is happening right now. However, if you step back and look at the company, they have a rock solid balance sheet. It has a very high margin services business that is growing behind the scenes, and that is becoming a larger part of the business. They are also getting more active in capital return, which at the right time, can make a lot of sense.

He needs three years of dividend history so he could own this. Tim Cook replaced Steve Jobs 5 years ago. It is the most valuable company in the world. The growth is slowing down however and it breaks a thirteen year streak. He would not buy in anticipation of the iPhone 7 release.

On this one you have to look at the valuation. It is very cheap and trading at 10X earnings. Thinks the bad news is all priced in, and you have to look forward to 2017-2018 when they have new phones. Hopefully they are spending all their money on R&D on new products and new ancillary devices and software that will grow their network.

One of your safety stocks within the technology space. She expects some revenue growth and some increase in the iPhone 7 for this quarter, as well as nice growth in the 4^th quarter in sales. Even though she doesn’t see huge changes, the age of the iPhone is getting old enough that she does see a replacement cycle coming in this year. Also, they have $29 per share in cash, either to pay higher and higher dividends or to do more share repurchases. Dividend yield of 2.14%.

The European commission is saying to the Irish government that they need to go to Apple and get back 13 billion euros in back taxes. This is outrageous. They are really using competition policy to go after this, and essentially their trampling over the sovereignty of Ireland, who can decide what tax rate to achieve. Thinks it is overreaching.

Thinks the bull case for this is that it is cheap and has tons of cash. However, it is hard to see, with 65% of its earnings coming from the iPhone, what is next. It is hard to see how this will grow, as you are not going to get it through iPhone sales or through iPad. A great company with great iconic products, but how do you grow that business?

(Market Call Minute.) Sold his holdings a few weeks ago. With the iPhone being 2/3 of its sales and slowing sales is a bit of a concern for him.

(Top Pick Aug 14/15, Down 5.73%) They are heading into a product refresh cycle. Apple is a different company today. It is more developed today.