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The Haverford Trust Company CIO Hank Smith and Mittleman Brothers CIO Chris Mittleman on the outlook for Apple and where the opportunities are for inv...
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Again our market now we have -- middlemen and Hank Smith Chris I wanna go to first you have -- let's start with -- this weekend -- because the question whether it's lost its luster as sort of a commodity lot of people and -- is six months ago we're talking about it as a commodity as.
As a stock -- just couldn't lose.
Has it lost that sort of image.
I think apple is a great company a generates lot of free cash flow.
Amazing balance sheet we don't -- the stock we actually have never owned stock and fortunately.
But it's it's a great business someone wanted to buy -- here I wouldn't have a problem with a what would you recommend it.
-- -- -- wouldn't recommend it is because we have other alternatives we like better -- and you know.
I do remember Sony in the eighties being looked at as.
The dominant provider of this type of thing and and that didn't last forever so I'm a little bit concerned about their ability to continue.
To dominate the way that they have with Samsung in these other companies nipping at their heels now.
I hate lets see -- -- here you pretty much positive on equities across the board which means I can assume that you probably like technology.
-- all -- news on Apple's some decline in I think Dell's big pop today on all the speculation.
Where do you fall in the tech sector.
Well look -- all we prefer our companies that paid dividends so apple falls right -- that Dell does not.
All we do own apple we purchase apple shortly after they initiated their first did dividend.
And we'd like apple -- both for the intermediate long term and believe the story is intact this is a secular.
Growth area talking about Smartphones.
And tablets and apple is going to be a major part of this growing pie sure they have competition.
But the best part about apple as compared to -- let's say in the late ninety's is there's no valuation had headwind.
How valuation.
At ten times earnings -- thereabouts even may be a little bit less.
Is not a headwind to this stock so we think you can comfortably use dips to add to positions.
And that's what we're going to be looking to do.
And so food today is certainly one of those steps by the way we're going to be talking a lot more with an analyst about apple coming up later in the show the Chris let's go to specific -- get off from apple for -- talk about eight.
I rented an Avis car this weekend I rented a zip car last week and now they're both in the same company it's it's had a big park today that you think it's an exciting company.
Yes we've been involved in in Avis Budget Group for a number of years now on the starts doing very well of late.
I think the stocks that just over 21 now.
We think it's worth around thirty dollars a share -- only about ten times free cash flow it's not a aggressive target price company generates both 360 million of free cash flow.
Ten times that -- thirty dollars.
Hey -- there's one area and we we only have time for one more question is one area that they don't like.
That's utilities.
Well yes yes they do have yields but not as attractive as they were a year ago the big thing there is.
-- valuation.
The electric utilities are selling eighteen to twenty times earnings.
-- for 844 and a half percent yield.
All of that is not a good combination for investors.
By the way Hank thinks the market's gonna do is well this -- it did in 2012 -- means another 50% jump I'm looking forward -- that hope you guys are right Chris battled and Hank Smith thanks gentlemen.
Thank you appreciate it are --
