Apple Inc (AAPL)

If you are a long term investor and bought it much higher, then hold on to it. The recent decline is probably overdone. They have a very dominant global brand. There are near term headwinds. He will buy it back at some point in the future.

Had the best quarter in history of humankind, and the stock dropped 6%. This reminds him of Microsoft (MSFT-Q) a few years ago. It was treated as a dead company and was never going to innovate, and had only one product. Apple is generating an unbelievable amount of cash, but don’t think for one second that this is just going to be an iPhone company. IPhone is 60%-70% of profits. Expect they will add more products and add-ons.

The valuation is just too low to pass up at this level. They will most likely increase their dividend in April. They are still gaining market share. His biggest concern would be a lack of pick up in China.

Just reported after the close. Had disappointing numbers relating to iPhone sales, and revenue looked a little bit soft. A classic example where the absolute numbers are actually staggering and quite impressive. The Apple excitement and growth rates are coming sub-10 now. His issue is that it is over-owned and over-followed, and the user experience has declined substantially. They have to fix their eco system service, which is getting complicated, and never used to be. Also, when the PE starts to come down on the stock, it is hard to turn that around.

We should be getting a good rebound coming in, so as a trade this makes a lot of sense. He expects a rebound, because the market has come down quite a bit. Be prepared to trade this if you want to be aggressive, but be prepared to Short when it runs out of steam.

(Top Pick Jan 15/15, Down 7.65%) They are in the midst of a ‘weak refresh’. The market is looking to the iPhone 7 later this year. Here is a company that makes 60% of their revenue from an iPhone with a 40% margin. Their customers are loyal. 73% of iPhone users have an iPhone 5 or older. There is huge opportunity due to the upgrade cycle to the 7 and successive products. A third of their market cap is in cash.

Apple was one of the clues that led him to believe that we could wind up in some kind of a correction, as it started to underperform the market in the last few months. Technically it took out some important levels in November and December. You want to identify companies, that for whatever reason, have prices that are holding up much better than the market. Where they have fundamental characteristics that point to something changing for the better and prices behaving like they should be, given what you think you know. Buying a stock that everybody owns, at a time when the stock is underperforming its peer group and the market, is probably not the right thing to do. As the stock price rallies, it is going to run into people who are just waiting for their opportunity to exit at “their” price. Good company, just not a good stock at the moment.

Shares are trading at very nice valuations and they have a very solid balance sheet with tons of cash on hand. Trading at 10X earnings, and still probably a 12% growth rate. Maybe the iPhones are not going to sell as quickly going forward. The company is still innovative, but the iPhone is still 60% of their business. There are rumours of them getting into the car business, iWatch, and maybe the gaming console, but the iPhone is going to be a tremendous part of their revenues for some time. This is getting close to his stop losses. He wouldn’t Sell until there is a little more of a breakdown. If you own use a stop loss.

Very constructive on this company. Trades around the stock by adding when it is low and selling higher up. Have a great cash position, and will be introducing the new iPhone 7. There could be a lot worse companies you could own.

Has tremendous respect for the company and the brand. The stock has sold off a little bit. If you X out the massive cash position, it is absolutely not an expensive stock. Half their profits are the iPhones, and iPhone sales year-over-year are tougher and tougher to grow. He struggles with this.

It was really beaten up. The iPhone is the largest part of their business. In the West, everyone who wanted an iPhone has one. However, in China, there is growth in iPhones. They are constantly innovating. They have lots of cash and a great history of raising their dividends. You definitely buy at these prices.

People frame companies. They think this one is a tech company, but he thinks it is a consumer entertainment company and a very good one. They are selling a consumer branded product. PE is 9 times with an enormous amount of cash and will likely increase the yield on the dividend. He expects a share buyback. He thinks there is tremendous upside here.

There is market risk. The company is not expensive, has a lot of cash and can withstand a lot of uncertain times. If we get a pull back, they will fall. Look for $90 to $120-$130 trading range over the next couple of years. He does not think it will grow.

It had struggles in the last year. He thinks they are getting off the dependency on selling a new phone to maintain earnings. There is massive cash on the balance sheet.

Has a low PE. The phone business is not going to be growing as robustly as people think. It is hard to get people to buy Apple in emerging markets, because it is quite an expensive product. However the company has a great balance sheet. They can increase the dividend and can buy back shares. He would like to see the numbers on their phones in the next couple of months.