Apple Inc (AAPL)

A Top Pick Nov 28/13. Up 27.14%.) Doesn’t think the iPad is the real mover of the company. He still thinks it is the iPhone. Valuation ex-cash is still cheap.

Valuation, net of cash, is about 11 times. This compares against the market of about 14 times. Thinks you could easily see 20%-25% earnings growth over the next year. When you see a company trading at 30%-35% discount to the market, with double its growth, this is quality on sale.

She is not thinking of adding this to her portfolios as it has had a nice run into their product announcements. It will probably have a pretty healthy holiday season and it is launching in China now. She would wait for it to pull back closer to its 200 day moving average of $86.72.

A very good hold. Don’t sell it to buy something else. It continues to be very attractive. They have overcome some of their issues like innovation. They are convincing the street there is innovation in their future. The watch will get some traction as a category in sensory items. The bill payment system will be a very big area of Apple’s future. The phone is a refresh item, but a big source of cash flow with sales of a 100 million units. A very bright future. The other side is their capital allocation policy. It is going to share buy backs. He, however, likes it.

Steve Jobs was the heart and soul so when he died it did not remain the same company.

Double Dutch Irish tax scheme. It allows them to shelter their revenues through Ireland. If the worst came to the worst they might have to restructure. He would not get too shaken out on the stock based on this. His problem is that most of their business is the iPhone. It is very fat for them. He does not see them growing around the world from here. He also sees competition from guys with razor thin margins. Everything they are doing speaks for consumerism and not technology. If they continue to raise their dividend the stock could still work.

If you own, you’ve had a good run and would be probably wise to trim a little bit. However, overall, looking at the technology space, this looks really good. They do 2 things primarily. Produces consumers’ products, but also has the operating system which you can use across your iPad, iPhone, etc. Thinks they have a lot of leverage that they are starting to pull. Valuation is not ridiculous and they have a lot of cash.

In terms of the area of the market that this is in, NASDAQ has proven itself over the last several months to continue to be the leader through this mid-cycle turn. The sector has a lot of things going for it. The refresh for Apple is going extremely well. If you own, she would continue to ride it.

Thinks the new watch is going to be amazing because he thinks it is going to be part of the whole point of sale transaction. It’s on your body and the biometrics is going to work and will just scan your watch when you walk out of the store. Feels the company is transforming the whole shopping experience. The ApplePay is a really, really big deal and the watch is going to sync with that.

At this price, you are paying only about 15X earnings. If you think they have growth above average, seasonally this is one you want to own as they are going to sell a lot of new phones, etc. and you will have a good quarter. He is seeing Wall Street targets in the $110 range, which is 10%, making it still worth holding. If you are back at $90, you would feel a lot more excited.

He’d be a trader. iPhone is 70% of their revenue. There is a lot of hype around new product launches. Thinks the iPhone 6 will be the largest launch in its history. A lot of users have been waiting for a bigger screen. A lot of people will upgrade, but he can’t see what they do after this.

Apple’s New Product Event: Ultimately, what Apple is trying to do, is to re-establish some growth in the business. They have a history of trading up into these events and then back off a little afterwards. It will really depend on what they come out with. There are high expectations for some new products. Payments could potentially be quite interesting, depending on how the business model works. This is something that a lot of companies have been trying to do, and Apple probably has a critical mass to drive. He would expect them to deliver some very great products. An investment in this company is just an investment in some very secular long-term themes towards wearables, wireless data, etc. Stock has been behaving well into the news and is in a strong sector.

She tends to avoid the consumer products side on hardware electronics. This company has done a phenomenal job. She is always afraid of how quick consumers are to change their minds, and to go after new things. If you own, she would consider trimming back and getting out of the holding.

Sep 9^th is perhaps the day they have an announcement of a new iPhone. The challenge is the price. There is a challenge to sell a $600 phone to people in China. What is left in the company to drive them to a higher value?

(A Top Pick Aug 26/13. Up 45.52%.) Thinks Sept 9 is going to be a big deal. We are going to see some new products and are also going to see a new business or two. Thinks they still have the brightest and best research department in all of technology. Had more cash allocated to research over the last 2-3 years. If you don’t own, he would buy half now and half after Sept 9^th.