Apple Inc (AAPL)

Has been a little disappointed in the last couple of months. The issue he has is that everybody just focuses on the iPhone numbers now. They are not realizing there is a strong franchise under their very loyal clientele. They need to step it up with some advance product announcements in the near-term. Expects this will be pretty quiet for 4-5 months and you’ll collect a nice dividend.

Not a huge fan of this company. Don’t confuse a good company with a good product. The growth of the company has been so large for such a relatively short period of time that expectations are such that this will continue. Feels there is more downside here longer-term.

Turning out a ton of cash. 30% of their market cap right now is in cash and will be 40% within 2 years. They are going to have another kick at the can with a refresh cycle with iPhone 6. Upgrades will be close to double what it was for iPhone 5. In China, with China Mobile, they have just scratched the surface. They are in 16 cities there and by the end of the year they say they are going to be in 300. With all that said, the investment in this company is in innovation. 2.44% yield.

Feels the numbers are possibly quite good both from the iPad side and from the iPhones. Consumer technology is behaving pretty well. This is one that you could own. It will be hard to have a huge win out of it. They have a tough act to follow and it will be hard for them to re-create the growth that they have had over time. Expects there are better spots to be invested in.

A bigger position in his funds. Likes the fundamentals of the company. Lots of cash flow and continue to innovate. He believes the company has way too much cash and it should go to dividends. M&A has been a pretty spotty strategy for the Apple. They are an innovation company. If you get an apple device in people’s hands they start buying the other products.

4^th quarter is becoming more cyclical for all the phone companies, so there is a good chance that the next quarter coming up could be a little bit weaker. Offsetting that will be the positive impact and the look-through as to what is going on with China Mobile and their sales. Another catalyst for this stock will be the new i-Watch they will be releasing.

(A Top Pick Dec 20/12. Up 5.63%.) Surprised it hadn’t done better. Still believes in the stock and that it should be trading closer to $600 a share.

When shares are bought back, pushed by activists, it often does not work. Typically share buy backs are positive.

(A Top Pick Dec 19/12. Up 7.73%.) Thinks there are a lot of exciting things happening for 2014. The biggest and most important are new products. We need another wild product and if we get it the stock is going to do extremely well. Not only will earnings, revenues grow, but there will be a revision of the multiples upward. These are the 2 things that really drive stock prices. Carl Eichorn is pushing for a stock buyback, so capital allocation is a possible catalyst for a higher price. Also China Mobile is going to add a lot of units, which is another support under the stock.

This stock could see some significant up move in 2014. China Mobile helps and there are new products that are definitely on the way in 2014. Sees improving demand for smart phones. For every phone sold, only 30% of them are smart phones globally. Valuation is cheap and you are not paying a lot for earnings. Doing all the right things.

(Market Call Minute) Once you get to be the biggest by market cap there is nowhere to go but down. Won’t make you much money over the next few years.

The only near-term catalyst that he sees is that China Mobile, which has billions of subscribers, is talking about launching the iPhone, which would be a big deal for the company. He is not a fan of this company.

(A Top Pick Dec 19/12. Up 9.95%.) Have their mojo back with their existing product offering. 5S phone is doing extremely well. Has been terribly undervalued the last 2-3 years on just their existing business. Feels their existing business can take them into the $600s and maybe to an all-time high. The really exciting thing is what they come out with in 2014.

Cheap by any financial means. This is why value managers and growth managers like it. You can expect that they will do more share buybacks and more dividends. They are so big though, they need to have revolutionary products to keep the momentum going. He looks at it as the next Microsoft (MSFT-Q), maybe a steady return and a good dividend but you shouldn’t expect too high a return out of this one.

Has about 15% market share in smart phones. They make about $200 net after taxes on each cell phone. 15% on 1.7 billion phones, that is $50 billion in profits, just on smart phones. Buying back stocks. Can see them earning $90 a share 3 years from now. Yield of 2.23%.