Tech has had a great run, since being sold off towards the end of the year (one reason the 2CentView portfolio gave up 3% (from up 15% to 1up 12%) in the year end run in – it is overweight tech).
Whatever Trump does, he cannot get in the way of advancements in Tech – otherwise the Chinese will overtake the US…. Apple, Google and MSFT alone are worth $2 trillion dollars!
FaceBook – reported another great quarter – Ad revenue still growing, FaceBook live is a big hit … 2017-2019 earnings estimates have been raised, and the company has been buying back stock.
2CentView fair value now $130 if you include the $10 cash. So why has the stock failed to break through $140 – the consensus target price is now $161. One reason, is that there has been a general rotation from growth to value – so investors are not paying up for growth any more – if growth is cheap (at $115 was a good price to buy if you didn’t own the stock), they will buy it – but it is not getting the premium it did before Trump – investors see great opportunity in value stocks as Trump policies begin to take shape..
2CentView has a core position in $FB and long term price target of $150. If Facebook drops back to 115, buy it!
Apple – reported a great quarter – as iphone Sales growth recovered again – partly helped by the issues at Samsung and partly because the iphone 7 and particularly the plus, were great hits. Services revenues continues to grow. The Cash generation is amazing – they have bought back $144billion of stock over the past 3 years – and they still have a WHOPPING QUARTER OF A TRILLION in CASH!!!!….So with or without innovation, the stock price will just keep going higher on buy backs alone – as long as the Iphone keeps selling at near 40% margins, Apple stock will go higher – and when the repatriation of tax break is announced – another $20 will go straight on the stock price – much of the cash held is actually overseas.
Apple is struggling in China however, – I got an Honor 8 phone, which has an Octo processor (actually have 3 phones now – Apple, Samsung and Honor 8) – it is amazingly fast – Apple should be creating phones with such power – hopefully the 8 will have 8 processors!
Keep a core position – the Iphone 8, expansion in India and repatriation of cash could see the stock reach in $150 in 2017.
$AAPL $120 vs $130 Yield 2%
2CentView has a core position in $AAPL. Patience is a virtue in investing, and the investment is Apple is starting to yield nice results.
Amazon reported a surprising lower than estimated revenue number, but higher EPS. The revenue number was expected to blow out the estimates as the sales over the holiday season expected to be very strong – but price competition affected even Amazon. AWS remains strong. Have to listen to the conference call (earningscast.com).
Investing in Amazon, is not about the EPS or the EV/EBITDA – it is having faith in Bezos’s vision – he still has some way to go – so if you’re investing horizon is 6 months, do not buy Amazon – but in 3 years this could be first trillion dollar company.
2CentView has a core position in $AMZN.
Alphabet is a great technology company – it dominates search and also involved in driverless cars, AI and cloud. The future of technology will be shaped by Google. Keep a core position.
$GOOG – FV = $740 vs $820
2CentView has a core position in $GOOG and looking to add a trading position at $750.
Stay long at least one of these great Tech companies!