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Austin Smith: Eric, what are you looking at?
Eric Bleeker: Just a few quick... Apple component suppliers, Cirrus Logic...
Andrew Tonner: Absolutely.
Eric: After this quarter, assuming the price doesn't budge, I think it's going to be about eight times its adjusted earnings [last quarter plus the following] two quarters.
Austin: This is a company that guided significantly higher, right?
Eric: This is a company that's increasing content, will continue growing into, basically, the third quarter of next year -- the third calendar quarter. It's something that, if you're not watching it as an investor, is a great place to look.
Apple being beaten down in some overblown margin concerns, I've really pushed it back, so Cirrus Logic one.
Corning, just because. People always talk about the PC coming back. Well, we've got a catalyst for televisions coming back.
Austin: That's really where they make their money, too. If you look at screen size, that's what they want.
Eric: Yup, and larger TVs, what has happened, people bought them for mobile. It's Gorilla Glass, it's a $1 billion dollar run rate but it's an $8 billion top-line business so it hasn't made up for TVs going down.
Face it, your TV at home that's six years old, you have no reason to buy a new one. You will have, especially with Apple TV competitors like Google and Microsoft wanting to follow into the space and get more aggressive.
Corning, let's just think about if, over the next couple years, this thesis played out, it's a company that can really flex earnings, especially if sales increase it's going to get good operating leverage. If earnings go up 50% and a P/E expands from a 10 right now to 15, you could have a double, and limited downside.
I would say my third idea would be short Research In Motion. It's run up enough I'm interested in this again. The interesting thing for me, Research In Motion, what's been buffering the company was the services fees. They get a super high margin for things like BlackBerry Messenger, their infrastructure.
They are under threat right now. People talk about the iPhone subsidy model being under threat; RIM's network fees are under threat as well. Their subscriber base has actually been growing in spite of losing market share.
With a really rapid upgrade cycle over the next year or two, I think a lot of those people are going to be upgrading, moving away from RIM. I think services are going to be under pressure from that and it's going to be under pressure from telecoms trying to save costs. It's about $5 a month that will pass through.