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Apple Still a Strong Investment?

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  • Description

    Icon Information Technology Fund Manager Scott Callahan on the outlook for Apple.

  • Duration 4:47
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Rally date now not so for apple but Apple's big shareholders took place with their meeting earlier this afternoon.

It left investors somewhat disappointed CEO Tim Cook once again.

Not allowing anybody inside so we have to imagine with our brilliant graphics department what he would look like sitting on Apple's cash Ford but.

-- fail to provide any specifics as to what he plans to do with the 137.

Billion dollars of cash sitting on Apple's balance sheet.

That's what has some investors very annoyed does it -- Scott Callahan -- com information technology fund manager.

Apple represents what about 70% of your -- holding Scott.

-- -- -- -- S&P 15100 information tech benchmark okay so so you you'll love it back then do you still love it now.

Yeah we've been -- -- for a long time that I come he's a value based investment methodology.

-- really zones out a lot of the noise and fluctuations are we really just focus on the fundamentals and intrinsic value of these companies well let's talk about that the meeting today you we're not there are personal -- to go.

Half half half.

And I kind of we're -- we're not emotional value investors so we really don't dig in the companies we don't visit companies.

We're really much on more on the balance sheet level just -- into.

Earnings -- long term growth forecasts.

Sounds like sounds like a guy we used to know named Benjamin Graham and then of course that Warren Buffett -- just days away -- it out looks at that the fundamentals of what he believes is a good company.

-- let's talk about the stock itself have you been buying at these lower prices.

No we've been holding through that turmoil over the last few months we've held our position.

And stable of that time.

None of our valuations we've seen some of the long term growth rates come down analysts have revised backwards but still not enough we're showing a lot of a lot of value of that name.

And even with some of that speculation on slow down growth and the revisions backwards.

Apple still shows itself to be really strong investment.

Doesn't sound like you're worried at all unlike -- David Einhorn who of course is agitating as a hedge fund manager about forcing apple to.

Give back some of that 137 billion in cash it has on its books back to the shareholders you view that I do agree with fashion.

You know I -- I'm sure there's a lot of noise being made at that meeting today.

But I -- we also read all of our companies through a -- quality metrics we try to quantify.

The management of these companies and how reliable and consistent they are in earnings revenue growth cost control.

And -- -- apple comparatively it's one of the best looking best managed companies we follow that that company over the past decade.

Has really proven itself to be a well -- it's strong company so.

To let these active -- shareholders.

Kind of dictate.

Where these capsules should be I put my trust more in Tim Cook and and the management of that come -- I am well you.

I am with you except for the fact -- that the company has now in a way at least for the moment I'm not saying for ever turn to a bit of an evolutionary vs revolutionary.

Yes the iPad.

The iPod the iPhone were revolutionary now they come out with 45.

Minnie and I think at that point people to wonder you guys aren't using that money to make big acquisitions they just how to build from within nothing wrong with that but.

It's just sitting there and when a -- starts to relieve.

They get to little bit of trouble as a shareholder -- -- stand up and say it guys what are you doing here.

Yes certainly.

I think some good that he's even indicated that that is a lot of money and he actually is actively pursuing options and what to do if it.

But in terms.

Of this preferred share the call for bigger dividends.

We believe that apple back cash level the -- is -- -- know what to do it fit.

And while paying back for dividends.

In the near term might be might be.

Helpful for -- stuck.

In the short term we're more concerned with long term growth we like to see a company's potential five to seven years out.

If that cash to -- is better for acquisitions for research for for growth -- -- the company we'd rather see it be spent through that than just given out to trust.

I asked this -- -- -- Shapiro.

You know a lot of investors obviously don't trust it seems Tim Cook as much as they did Steve Jobs do you.

I don't put any personal take into that Coke vs jobs.

I'm certainly cook has been more.

Lenient and more sympathetic towards shareholders than than jobs was but -- Really we're just looking at a non emotional I'm not to speculate.

On where he's gonna go personally I just look back from the history and the integrity of the board -- about the management up until this point of my second.

Scott Callahan manager of icons information technology fund it with about 17%.

Of it in apple will be watching the stock -- I'm sure he will will work closely thank you very much.

-- closing.

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