Apple Inc (AAPL)

(A Top Pick July 10/14. Up 37.1%.) This choice came down to the whole company and their suite of product offerings. He has taken some money off the table. This will continue to grow. Thinks it would be very hard to pull people away from their Apple products.

Not his kind of company. Has been thinking for years that it was overvalued, but it keeps on going up. It does share buybacks which makes no sense to him. They’ve taken on debt that also makes no sense to him. At some point he thinks they will have difficulties.

Thinks it will go higher. He does not know if the iWatch will be successful, however. He is more concerned about market risk in the back half of the year so he does not like to look at stock at all time highs. Don’t chase it here. Don’t put new money into it.

(A Top Pick April 10/14. Up 75.36%.) This still goes higher. Still a cheaply valued stock. Beat earnings again last week. The iWatch and Apple pay are going to be additive to earnings, and more importantly additive to the eco system.

(A Top Pick Oct 14/14. Up 32.6%.) This company is always going to go from a position that it is such a big company, people won’t believe it is going to grow any more. The iPhone 6 is a very specialized iPhone and is taking market share from other vendors. Dividend yield of 1.61%.

Earnings are coming out on Monday and there is a lot to be cautious about when earnings are coming out. This stock can be a bit weak following earnings. This is a growth story and it is hard to find periods of negative strength for it. Technically it is consolidating right now and forming a bit of a triangle, so you are waiting to see it breakout. There is a developers’ conference coming up, and that is where investors get really excited into June, so that might be the time to pick it up on the cheap.

Believes the biggest theme in this market is consumer globally. This is probably the greatest consumer product company on the planet. Very inexpensive trading at 13/14 X earnings. IPhone 6 sales, in the most recent quarter, had only about 15% going to current iPhone users, meaning they are taking market share from everyone. Their service business is 10% of revenues now. Dividend yield of 1.48%.

(A Top Pick April 14/14. Up 73.52%.) Sold some of his holdings in order to get his weighting down to 5% of his portfolio. This remains an exceptionally exciting business to own. You can Buy at these prices. A well-managed company that is capable of creating new product categories and attracting intelligent people to work for them.

Good companies that have high ROE’s and generate lots of free cash flow with great branded products are going to grow. Thinks they are going to earn $8.40 this year and well over $9 next year. Add in the cash balance and trading at 10 or 11 times earnings, it may be the best company in the world. Dividend yield of 1.47%.

Because the market has been so frothy, based on the free money, he would wait for a pullback in this as well as in most stocks.

With the amount of cash they have, there is a cushion to see dividend raises continuing to come forth. They have really executed on all fronts. Their foreign expansion of smart phones is continuing. Last quarter, sales in China were up 70% year-over-year. They still have a very small market share in Asia, so there is further upside potential. They are continuing to innovate which is important for the future.

Looking at the seasonals, this does have some weakness in June, a little bit of weakness in January and December, but the rest of the months are very positive. The most positive month is April. He still likes the stock and it is still trading at a reasonable valuation. Lots of cash on the books and lots of opportunity to continue to do well. Trading at a PEG ratio of .9, which is a pretty decent valuation.

Trading well below market multiple, yet it is growing at a faster rate. That tells him that over time it will make that up, and go to levels that will take it to a valuation more in sync with the market. This is not overvalued and has some room in front of it.

He thought APPL would get creamed at some point but overall it has continued to go up. Tech companies do get beaten down at some point. You have to keep coming back with sexy products. He thinks it is crazy that they took on more debt when they had so much money in the kitty. Tech companies do get beaten up at some point.

Stock vs. Stock. BRK.B-N vs. AAPL-Q. The actual price should have nothing to do with it. If you want to hold it 5-10 years then choose BRK-N. In Apple’s space, they take turns dominating the space, so he can’t be sure of it for 5 to 10 years. Buffet may not be around in 10 years but he has good people running the company.