Apple Inc (AAPL)

He's been trimming it when it gets expensive, and remains neutral. Apple is a great business, but some of their businesses are decelerrating. They have huge cash balances, though. He's long term.

No question that tensions between the US and China effect Apple. Apple shares are down only 1% this morning. Foxxconn, remember, is a top 10 employer in China and Foxxconn builds a lot of iPhones for Apple. The market knows this. So, Apple is struggling in China? No. Apple remains one of the best-run companies in the world, and they have earned their premium valuation.

When this was reported this morning, the Nasdaq features dipped briefly only. There's enough broad strength in the megatechs that tech will be resilient, even if Apple becomes the weak link among tech.

They've had a wonderful return this year. Pre-Covid topline revenue growth and we're returning to that. (Growth accelerated during Covid.) Note: they keep buying back shares and reducing share count, so EPS keep going up. She's happy to sell her $195 calls. Services and phone sales will be strong.

Apple is purely trading off technicals. Their chart iS perfect. It broke the 50-day moving average in January and September, but fell below it in mid-summer and is currently snapping back.

Revenues have declined in the last three quarters and likely will next quarter. The story is always valuation: 28x forward at only an 8% growth rate long term. This downgrade is a few quarters too late.

Megatech offers investors resilence in a higher-for-longer interest rate environment. Not not-profitable tech or consumer discretionary. Energy is another sector that offers this confidence, but no other sectors.

It's such a large company, operating in so many verticals that there will always be a reason to worry about it, but he's held this stock forever and won't sell it. Nothing fundamental about it has changed. They continue to develop in many interesting areas. Not worried about its future.

It continues to re-invent itself and now is a good time to buy.

Having iPhone as a major component of revenue poses a problem, considering each new iteration is not all that different. 27x forward earnings for a 10% EPS growth rate. Quality and value, given balance sheet and cashflow. 2.7x PEG ratio, not inexpensive. 7x forward price to sales, not cheap. China's restriction on iPhones is a headwind.

Is underweight it. It trades at a high 29x PE and they reported -1% earnings decline as well as -5% in revenue and -2% in iPhone sales, -20% in iPad sales and -7% in Macs all in the last quarter. What are you getting with this? Well, the free cash flow, gross margin expansion, opex under control. But 29x is rich. Would buy on a pullback.

It buys Qualcomm time, but the difficulty in reaching this deal suggests how hard it is to produce your own chips and maybe it shows how much Apple needs Qualcomm.

Revenues are flat, but the PE is high. The top and bottom lines need to increase and this could happen if there's demand for the iPhone 15 Pro, which looks promising. But also, is the consumer tapped out? Headwinds can also come from China which accounts for 19% of their revenues, given government intervention and the new Huawei phone competing for sales.

We all know and use their products, and they have a recurring revenue machine. Remove their Covid growth, and Apple's revenues have been anemic. Earnings always beat because they have a big share buyback. This year, shares are up 30+% in a great year. She sold calls and shares are at the high end. She's holding it long term. She wants to see more topline growth.