Apple Inc (AAPL)

This is maybe the year that Apple will peak out. The iPhone is 70% of their profits. They come out with imperfect products so that people will have a reason to upgrade. Samsung is always ahead of them. They held back on the larger screen and finally it came out in the iPhone 6, which will probably be the best selling product ever as it has the largest adoption rate. The next iPhone sales will not be as great. You might want to start getting out.

(A Top Pick Nov 28/13. Up 47.9%.) This is the biggest holding for his clients, and it is still a Buy. He takes out the cash and looks at what it is going to earn and wonders why he is paying a discount price for a premium company. It should trade at 20X earnings. Thinks it could be a $200 stock.

Don’t buy it at a record level. He has never owned it. One product almost generates 50% of their revenue and this bothers him. It is such a large company that at some point it will be harder and harder to grow. Thinks the Christmas season is already built into the stock price. The price may pull back at some point. Thinks they will not be able to innovate as much as people think.

Looking at technology, it has become a bifurcated market. Some of them are just getting smoked and some are struggling, and yet you see this one trading at a relatively low multiple. It really has the best ecosystem in technology. There are well over 50% margins on the iPhone. Don’t know what their sales are yet officially, but there are rumours they are in the 60 million+ already. He thinks it is certainly worth north of $150 a share. Yield of 1.58%.

Not as good a value today as it was 6 months or a year ago. Got to a point where it was priced for extinction. There was no premium built into the stock for innovation. There was a period of time when the capital allocation policy was really not a good one. A lot of that has changed. Also, they are now in China. The latest analysis says that they could do over 70 million units of the iPhone 6, a high-margin product. That will put their gross margin into the 40% range. At this price, it is trading at about 16X earnings, and if you net out the cash you are down into 13X. Still not expensive. Have a policy of capital allocation where they return to the shareholders the equivalent of about 8% of their market cap per year, both in dividends and buybacks. Feels the market is starting to recognize that this company can still innovate.

Apple (AAPL-Q) or General Electric (GE-N)? Two completely different plays in different segments of the market. This has had a great run recently. Thinks this has gone through a crisis period and came out very well. iPhone 6 is selling very well. Have a great brand recognition. He thinks people continue to underestimate and undervalue things like iTunes and the software in general.

If you own, taking some money off the table is always a prudent decision. Doesn't feel this can keep going up at the rate it has been. Likes the products and the valuation. Cash flows are great. Thinks people are getting carried away by expectations of the holiday season.

Nothing wrong with it. He was skeptical they would be able to come out with new products. He has an iPhone 6. It has never been the value. You are okay keeping it here. Switch out if you see a fundamental reason.

This has been a core position for his clients for almost 9 years. He still likes it. Management is very shareholder friendly. Trading at about 13X earnings. If you incorporate the cash that they have, it is trading at about 11X. Still good value.

A great company that has done incredibly well over the last little while. About 55% of their revenue comes from one product, the iPhone. With the bigger phone, it is going to eat away at the iPad business. The last thing they have been doing is financial engineering by buying back more shares, paying a bigger dividend, etc. The phone is really the thing that drives this company. It is probably more in a slow growth phase.

Today's short-term reversal has more to do with the upcoming Fed announcement. It has had a good run as of late. He likes this and just bought some. Feels it is worth significantly more. The ecosystem works phenomenally, i.e., once you have one product, the other products work seamlessly.

Trading at about 15X near market valuations, but better than the market growth rate. Still a pretty good name. Trading at under 1.0 PEG ratio, which is pretty cheap. Thinks the valuations are getting more normalized at this point.

A Top Pick Nov 28/13. Up 27.14%.) Doesn’t think the iPad is the real mover of the company. He still thinks it is the iPhone. Valuation ex-cash is still cheap.

Valuation, net of cash, is about 11 times. This compares against the market of about 14 times. Thinks you could easily see 20%-25% earnings growth over the next year. When you see a company trading at 30%-35% discount to the market, with double its growth, this is quality on sale.

She is not thinking of adding this to her portfolios as it has had a nice run into their product announcements. It will probably have a pretty healthy holiday season and it is launching in China now. She would wait for it to pull back closer to its 200 day moving average of $86.72.