Apple Inc (AAPL)

This is a very event driven name. Tends to trade off around the time of a product release cycle, which always represents a great opportunity. Among the cheapest large caps given the cash on the balance sheet. Doesn’t think $120 as a target in 1-2 years is out of line.

Not a fan of this company. The old Apple under Steve Jobs was a revolutionary company. Under current management, it is an evolutionary company. The hand set business is a lousy business and has been so from day one.

Sometimes it is hard to stick with what is working. Just about to release a new iPhone. There is growth in the BRIC countries. They have the watch device. There is a JV to provide enterprise services. It is behaving very well and has strong dividend growth and strong free cash flow. Great balance sheet.

(A Top Pick July 17/13. Up 61.67%.) Had a 7 for 1 stock split. Thinks the market has refocused. Has gone from euphoria when the iPhones were being introduced, followed by the doldrums when people were pricing the company for extinction. We are now moving back towards the euphoria phase with a new product cycle that is about to hit us. There will probably be an iWatch. Have returned $78 billion to shareholders in the last 1.5 years. Have another $50 billion or so, to satisfy their commitment. Thinks the stock can go higher from here. Still represents excellent value.

We are now looking at 1.25X PEG ratio, which is not expensive, but not cheap anymore either. Not sure if you should make a new purchase at this time. He would wait for a pullback.

Really positive on the stock. The split is helpful. New phone and potential new products. Generally thinks it is due for a good refresh cycle. Great balance sheet.

She got out of it because the handset business was commoditized. They split their stock and are buying some back. There is some momentum on the release of new products. Don’t buy because it is close to all time highs. The old tech stocks are rather mature so she recognizes that much of their growth is behind them. Social media stocks are hard to buy for a value investor.

Google (GOOGL-Q) or Apple (AAPL-Q)? Given this choice, he would pick Google. On a balance sheet level, etc., they are very similar. Google is a software company whereas Apple gets about 60% of their revenue off of one product, the iPhone. There has not been a real product from them for a long, long time. Also, this company has gone up a lot more, but that has to do more with financial engineering, as opposed to anything else.

They did the stock split. 20% upside to get to its model price. iPhone 6 is coming with two different sized screens. He already got in. It is consolidating here.

Believes this is as good a company as many others and should trade at a premium to the S&P 500 multiple on earnings. $115-$120 is where fair value is. Good things happen to companies that generate this much free cash flow.

Compared this with the QQQ-Q on a 3-year chart, and it showed Apple as a huge Outperform in 2012. Gap was closed in 2013, but is now again trying to outperform. Keep an eye on that peak in 2012, which seems to be the target for it. He would be careful. It could be a double top. You want it to clear the high of 2012, by at least 5% on a weekly basis, to confirm that it has broken out to new highs.

Thinks they are really changing their whole structure. Took over the music thing of Dr. Dre about a month ago. They are forming into some kind of an entertainment company, and is completely different than it was a year ago. They are now paying a dividend, and we have always known that when it comes to tech companies paying dividends; it means they don’t know what to do with their cash. Maybe there is not a big R&D component anymore.

It is his longest holding. It is cheaper than 90% of the S&P market. They are getting into music streaming. The stock can continue to do well, although not a 30% grower – more like 10-15% growth. Two new phones coming out could be a catalyst. The iWatch should help also. Continue to hold it until the new phones come out at least.

It appears that it just wants to keep chugging along. Great company and good products.

More of a value kind of stock and is with the Microsofts (MSFT-Q), Intels (INTC-Q), etc. Not an expensive valuation. They have been doing some financial engineering such as issuing bonds, paying dividends and buying back stocks.