Apple Inc (AAPL)

Owned since 2006/7. He trimmed it 7 times. All of the issues of capital allocation policies, buy backs and refreshes of a phone are all incidental. The real future is in innovation, things we have yet to see. That is the thesis that puts him in Apple. They have a good dividend policy as well as aggressive stock buybacks. We have to see in the fall and in 2014 how they do with new products. Great stock for your portfolio.

If you own, you might want to take some profits. The smart phone market is getting pretty fully penetrated, especially the high-end where this company participates. Smart phones is a product cycle driven market.

Thinks this business is all about new product. There is a new iPhone coming out on Sept 10. Their new iPhone was similar to the one before that. When a tech stock starts paying dividends or buying back its own shares, it tells him that that is the best thing they can do with their money. If that’s the case, then the R&D pipeline is maybe kind of bogged down. He believes the stock will be higher 6 months from now and there will probably be more new products before December.

Way too high priced for him

He has a model price of $535 giving it a 15% upside. However, he thinks it’s going to have major resistance at $500. The balance sheet is growing very, very quickly.

(Worst call ever made.) He had a $423 Put Spread which expired last January. He had said that people that had this should stay with it because he didn’t think Apple would ever see $400 again.

Recommendation for a safe Canadian or US funded fixed income product in the technology field with a 2-3 year hold. Buy some of the Apple (AAPL-Q) bonds. Very safe credit. There is a 5-year and the 10 year that you could hold but he would buy the 10 year and hold it in the context of a portfolio. Has the best credit rating of any technology company other than Microsoft (MSFT-Q).

This has gone from the most loved company to probably the most hated. After cash is taken out it is trading at probably 7X earnings. Has a capital allocation policy that is new over the last few months. Right now they are paying about a 3% dividend. Committed to a $60 billion buyback which probably adds 2.5%-3% to shareholder return. Has a 15% free cash flow yield. The opportunity to the upside is that they come out with a product that catches on, in which case it will be a very successful re-emergence. The downside is that it becomes a little bit like Microsoft (MSFT-Q), a sort of utility like vehicle.

Badly in need of a catalyst. Share price is off almost 45% from the highs. With 10X earnings, a tremendous R&D capability behind it and the Eccosystem that is going to keep their existing customers there, now is the time to be Buying. Expect there will be a big move over the next 2-3 years.

Still buying this for new clients. He loves to buy stocks that are hated. At some point the dividend will be higher. Thinks the 2014 will be a better year for this company.

If the iPhone somehow becomes uncool, that will clobber them. Their market share has peaked as tablets have been commodities. Doesn’t want to bet on consumer trends.

As great a company as this is, it is a gadget maker, although a very cool gadget maker. His issue is that competition has caught up from the other gadget makers. Also, when you have an iconic person like Steve Jobs running the company, mediocrity runs away. Great company, not expensive, has lots of cash but he doesn’t think innovation will continue.

He is positive on this company. 2 things had to happen to move the stock. One was they had to get their capital allocation policy in place, which they have done and will be distributing about $100 billion by the end of 2015 through stock buybacks and dividends. The other, and more important issue, is to convince the market that they continue to be an innovator, and if they can, this is a great opportunity. They are talking about a number of new products starting in the fall of 2013 and going into 2014. A solid company and very inexpensive.

Recommended at 571.72 now 434.58 down 22.35% They did a share purchase plan a few weeks ago, which put a floor on the recent drop in share price. Still some catalysts, Apple TV, Iphone. Have started buying it for new clients recently. The growth won't be as big as it has been in the past.

Has been YOUR tech spot until last month. It has been bottoming for some time. He wishes it to retest previous levels.