Apple Inc (AAPL)

Completely comfortable owning this. Doesn’t see any reason to make a wholehearted switch out of this and into something else. Thinks this is undervalued and that their dividend is going up. Their enterprise has grown at something like 65%. 1.8% dividend yield.

Reporting after the bell today. The valuation is just so compelling at 11.5X next year’s earnings. 8X if you strip out the cash. He probably wouldn’t be a buyer this afternoon just because you never know what you are going to get on the earnings. They continue to hit on all cylinders. Dividend yield of 1.8%.

He uses puts and calls to manage his position. It is starting to seem like a source of funds for a lot of people. He likes it here, though. The iPhone is selling well in China. At this price it is very attractive. He has been selling puts at $100 and has been keeping the premium.

1.9% dividend. He does not expect them to stop buying back shares. The dividend is low, but it is still a growth company. It is his biggest holding. He has no trouble with 10 times earnings.

He has always worried when you have to sell devices quarter after quarter. They moved toward more of an ecosystem of recurring revenue, e.g. iCloud and iTunes. iPhone 6 sales have been great, especially into China. A lot of the risk is suddenly out of the story.

There are a number of stocks like this one that have an expectational set up where management delivered, but expectations were higher. They have reset investor expectations. Give it a bit of time. He does not believe in averaging down.

It is only the 3^rd time in 10 years it broke the 200 day (back in August). Each advance since ’06 has made less as a percent of stock price. The advances in AAPL-Q are shrinking. The market is saying the honeymoon is over. He thinks it will rally up to the 200 day.

He has not owned it because he is a value investor. It is not a value stock. It is becoming more value than in the past and he might look at it in the future, however he feels it is past its `best before date`. The watch is the only product not initiated by Steve Jobs.

Historically not a good time to buy it just before a new product. This one includes China as well. The stock is not set up perfectly. It is not expensive and there is a mountain of cash, but this is not the time to own it.

Every stock has a sensitivity value to the index. The DOW is a horrible index. If AAPL-N’s share price is cut, it is so heavily weighted in the index that it impacts the index greatly. A utility stock, for example, will have a very low beta because it is not very related to the market index.

(A Top Pick Dec 12/14. Up 4.65%.) The magic of this company’s platforms is that they open up the platform to 3rd-party developers, and come up with products that people haven’t thought about that they want. This is undervalued compared to the S&P 500. Dividend yield of 1.83%.

Has a significant amount of cash on the balance sheet. Valuation is trading low, but right now they are in somewhat of a limbo phase. There is not a great deal of excitement with regards to any of the new ventures they are going into. Over the long-term, you could see incremental increases in their dividend. There is a big CapX spend coming up, and most of the analysts don’t know what it is in respect to. This is cheap in absolute terms.

Continues to perform well. Trading at 10X PE ex-cash. A pretty good valuation for this company. IPhone continues to impress. Gaming console, a car and all those types of things are catalysts for them. He doesn’t see selling this anytime soon.

(A Top Pick Aug 15/14. Up 16.56%.) His model price is $156.53, a 40% upside. There is a lot of value. This is all about the iPhone, which is 70% of their earnings. Thinks it gets volatile here because the earnings look a little shaky. Doesn’t think the iWatch is even close to being a hit. AppleMusic is a dud. The company is going to have to drive hard to maintain its valuation. If there is any disappointment whatsoever, this goes back to $85 in a hurry. He would be interested at $85 for a trade.

Despite the huge run up and share price over the last 5 years, it is still cheap. Scores in the top 10% for him on value. Has a 41% ROE. Trading at about 12X earnings. Pristine balance sheet.