Apple Inc (AAPL)

Raised $17 billion in a bond issue which he thinks is absolutely insane. For a company with $100 billion plus in cash to respond to a hedge funder to do a massive share buyback, raise the dividend and borrow money makes absolutely no sense. It always worries him when companies try to raise shareholder value by doing a massive share buyback. Great company but they need to come out with a new product. Losing traction on the phone side to Samsung.

Has been buying at these prices. Feels that it offers value. Challenged in terms of some of the market share dynamics going on with Samsung. However they have a pretty good moat around their business in terms of their eco system. Has a very strong brand appeal. They continue to take market share.

Such a big part of culture. They revolutionized how we use technology. How do you replicate that again. She prefers Qualcom because they have the patents on all the technology and the chipset side of the business.

No one can argue about the value in the company. There is $140 billion in cash and it is paying a dividend. Its products are not going away. There is lack of enthusiasm right now so this is probably the time to be loading up on the stock. This is at the height of maximum pessimism.

Although he owns this, at this point he has 2 major issues. One is capital allocation policy. They have $137 billion and they have to figure out what to do with it. Secondly, they have to overcome this wave of pessimism that is sweeping over the company. This is sort of rooted in the idea that innovation died with Steve Jobs. The market is looking for a new innovative product such as a phone, iPad, TV, etc.

(Market Call Minute.) Have a lot of cash so it is safe. She is waiting to see what the next product line is going to be.

(A Top Pick March 2/12. Down 15.62%.) Has clearly changed from a momentum stock, even though the valuation never approached dangerous levels. Feels a little bit of momentum is coming back. Earnings growth has flattened out in the last couple of quarters but doesn’t think it’s going to stay that way forever. Trading at only 10X earnings. Could see it moving into the mid-to high $500’s this year.

Has just started purchasing this. At these levels, the cash flow yield is over 10%. PE multiple is below 10 times. A third of its market cap is in cash. Generates about $20 billion in cash each quarter. He knows that at these levels there is a catalyst in place to have to return cash to shareholders. It could be through a much larger dividend or a very large buyback.

We are not ready to get into Apple. They made an announcement they would bump the dividend. Sees 3-5% correction in equity markets so use that as an entry point for Apple. One more lower low and then you can nibble.

It has 10%-11% projected earnings growth according to some analysts. PE of 9.8%, which is ridiculous. Very cheap.

Sometimes stocks become so over owned that when technically they start to sell off, they become a source of funds for other types of investments. Samsung seems to really be attacking this company. Innovations have been less than exciting. To compete they are going to have to either innovate, which will impact their margins, or will have to compete on price, which will also impact their margins. (He is Short this stock.)

It should hold at the current level. If it breaks down through $430, it’ll probably go down a bit further, high $380’s-$390’s. If you believe in this on a long-term fundamental basis, it will have a lot of grinding through those places where people paid much more and are trying to get their money back. There are better stocks in this space.

At this price, it is a steal of a deal. Pick up cash and is trading at 6.5X earnings. Dividend yield is attractive. Something has to be done about their cash balance and hopefully they will announce something at tomorrow’s annual meeting

(Top Pick Jul 6/12, Down 24.44% Total Return) Incredible value. It is so cheap. But earnings could be problematic over the next couple of quarters. She has been selling at higher prices.

It is pretty compelling at this point. Valuations are pretty compelling. Issues are size of company and they reinvented part of the tech space and now what are the next steps. Prefers Qualcom because they make the innards of the handsets.