Apple Inc (AAPL)

(A Top Pick July 15/15. Down 19.25%.) Got rid of most of his position by year-end. He was worried about the comparisons on the iPhone 6 going through. The company is having trouble growing right now, but the flipside is it is extremely inexpensive, and a much bigger percentage of the business is turning into a service business model, which has a recurring growth revenue stream.

The largest market cap stock in the world. Half of their revenues are the iPhone. Sales are slowing as people keep phones for longer. It looks cheap as a large part of the market cap is in cash.

The chart is starting to look a little rough. The 200 day moving average is falling and the stock is below the 200-day, 100-day and 50-day averages. The concern is how much further can the iPhone actually go. It represents two thirds of their revenues, which is very significant. If Apple does not succeed in China, it is going to spell a little bit of trouble for the company in terms of growth. The years of its extreme growth may be behind it. Right now he is looking for an exit point.

The market is questioning their future growth, but their balance sheet is very strong. They have lots of cash. They aren’t going to run into any financial difficulty for a long time. Product innovation seems to be waning a bit. They will be launching a new phone later this year, which may be a catalyst. Their phones are very expensive, so demand is not keying up as quickly. If the markets get shaky, this is a stock that is going to hold.

He is still an Apple Bull. Warren Buffet took a position this morning. You are starting to get these refresh cycles. You have to look at their ecosystem. These guys are monetizing IOS. There are only two operating systems in the space now and Apple owns IOS.

The sales of cell phones obviously starting to decline. You have to look at this company in 2 year increments. Definitely the replacement demand is there for the next generation. The next iteration, iPhone 7, is not expected to be all that spectacular. It’s when we get to the next generation, when they have these OLED devices, flexible plastic. Likes the name and feels it is trading very, very cheaply, and still has high single digit growth.

(A Top Pick June 5/15. Down 29.24%.) Thinks people are really starting to get worried about innovations. Feels they are going through a transition from being an emerging company, aggressive innovation that continues to grab market share. That strategy is now saturated. Pretty much everyone that wants an iPhone has one. We need to look at this more as a mature company. If they paid 3.5%-4% in the form of a dividend, the street would probably be more patient with them.

Wouldn’t own this stock. He has clients that own it, and they are going to start selling it. The signs are in that the company has finally hit the end of the road. Their problem is that their products are very expensive relative to their competitors, so profit margins are very high. The P/E ratio is not very high. The only way the stock is going to continue to go up is 1) to convince you to buy a new iPhone every 2 years or 2) invent a new device. Early signs are that the Apple watch is not moving the needle.

Trading at only 10X earnings, but if you take out the cash, it is probably only 8X earnings. They are increasing their dividends. 63% of their revenue comes from the iPhone. In the last quarter everything fell. IPhone7 is coming out which he thinks will offer added products. Dividend yield of 2.45%.

People either love it or really dislike it. He continues to like it. In the last 15 years, this stock has been halved 3 times. It’s not like it is different this time, but you always have to look into the future. This company, over time, is growing well. The latest quarter, which was an off cycle quarter, didn’t grow so well. While everybody wants to fit the equation of quarter to quarter, the product cycle of this company doesn’t work quarter to quarter. Had a fantastic introduction of the S model iPhone, where units grew 40%-45%, followed by the off cycle. Putting the 2 together you had a pretty good progression.

Great balance sheet. Great products. Great services. Trading at 11X next year’s earnings. If this is overpriced, yielding 2.5% (more than the US Treasury bond), then the whole market is overpriced. A very dynamic company that has lots of products and services. Thinks it is going to continue to innovate and that there will continue to be growth in emerging markets.

It is a ‘yesterday’ stock. He does not see what is going to make this stock go up a lot. The handset business has been shown to be a graveyard business for a lot of other companies.

Reported disappointing earnings. Carl Icahn sold all his shares yesterday, so the stock came down pretty hard this week. At $94, it is just a little over 10X next year’s earnings. Still a dominant product in the smart phone area. There are concerns about lack of innovation and lack of growth in China. They’re being valued cheaply, but still generates tons of cash. Buying it here your risk is limited. Should they come out with that next big thing, it could be significantly higher. In the interim, you have a strong Eco system in the service side of the business, which was up 20% last year. The iPhone 7 is also coming out later in the year.

He rarely buys a stock over $10. Thinks Apple are making huge errors. They are taking on debt, and why with the amount of money they have in the bank? Also, buying back stock doesn’t make sense to him. This is technology, which can be very, very good, but can have problems for companies when they are very technology-based. It could certainly go higher, but at some point often, technology is not the leader in the field anymore, and then the stock price gets killed.

(A Top Pick April 21/15. Down 14.2%.) Was stopped out, and doesn’t own this currently.