Is Carl Icahn Right About Apple Inc.?

Activist investor Carl Icahn is trying to rally the troops in support of his buyback proposal. Apple has officially asked shareholders to vote against Icahn. Who's right?

Jan 25, 2014 at 9:00PM

Well-known activist investor and billionaire Carl Icahn tweeted that he has now boosted his stake in Apple (NASDAQ:AAPL) by $500 million to $3.6 billion, calling the company a no-brainer investment, and is continuing his fight for increased share buybacks. He has now issued an open letter, calling his fellow shareholders to arms. In his seven-page letter, he notes that the S&P 500 trades at a 71% premium to Apple, which he calls a "dramatic valuation disconnect." Icahn's annoyance with Apple's enormous cash hoard is obvious, but does his proposal make sense?

In this segment of Tech Teardown, Erin Kennedy discusses Carl Icahn and Apple with Evan Niu, CFA, our tech and telecom bureau chief. The number of Apple bears has been on the rise recently ever since the stock fell from its high in 2012 and lagged the market considerably in 2013, but Icahn has defended Apple's prospects. He believes the company's unrivaled customer loyalty will be the key to it maintaining pricing and margins going forward, and he's still bullish on Tim Cook's leadership. He also sees Apple getting into Ultra HD televisions, which he thinks could generate as much as $40 billion in revenue annually.

With Icahn having backed off from his initial call for $150 billion in buybacks and revising down to $50 billion, Evan sees that number as reasonable. He agrees that Apple does have too much cash on the books, and could see a $50 billion share repurchase before the end of the fiscal year in September as making sense.

But is Apple the best play to get rich off the smartphone explosion?
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Erin Kennedy and Evan Niu, CFA, both own shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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