Taking a Third Bite of This Tech Giant

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

This week’s Alpha Algorithm has selected yet another familiar tech name: Apple, Inc (AAPL).

Recall that you sold out of Apple on June 9 at $149.00 for a 25.33% gain. Although the stock has been stuck in a narrow trading range of around $145, Apple has crept back up to become the #1 stock among the Alpha Algorithm strategies.

Apple, Inc. (AAPL), of Cupertino, California, designs, manufactures and markets mobile communication and media devices, personal computers and portable digital music players to consumers, small and mid-sized businesses and enterprise and government customers worldwide. It is the largest company in the world based on market capitalization.

Apple (AAPL) versus the S&P 500 year to date.

14 Top Investment Strategies Betting on Apple, Inc. (AAPL)

  1. High-Quality Stock

The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.

  1. Fundamental Strength

This is a top U.S. stock based on fundamentals measured by book value, cash flow, sales and dividends.

  1. Momentum Model

The stock is among the top approximately 100 U.S.-listed companies to demonstrate powerful strength characteristics relative to the 3,000 largest U.S.-listed companies.

  1. Goldman Sachs Active Beta

The stock is selected according to four factors — value, quality, momentum and low volatility. These, in turn, are based on criteria including book value, sales and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.

  1. Small-Cap/Value Tilt

Selected using a multi-factor modeling approach, the stock is a smaller-cap or value stock designed to enhance portfolio risk/return characteristics.

  1. Shareholder Yield

This is one of the companies on the U.S. stock market that is (a) paying cash dividends, (b) engaging in net share repurchases and (c) paying down balance sheet debt.

  1. Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.

  1. Hedge Fund Alpha

Based on publicly available disclosures, successful hedge fund managers are investing in the stock.

  1. Hedge Fund Gurus

The stock is one of the top U.S.-listed equity positions reported on Form 13F by select hedge funds with concentrated top holdings.

  1. Deep Value

This strategy tracks an index of 20 stocks selected from the S&P 500. It identifies undervalued stocks using proprietary quality screens — positive earnings, dividends, etc. — and valuation metrics like enterprise value to earnings before interest, taxes, depreciation and amortization (EBITDA).

  1. Goldman Sachs Hedge Fund Index

The stock is part of the Goldman Sachs Hedge Industry Index, which tracks an equal-weighted index of the 50 most-frequently held U.S. companies selected from the portfolios of hedge funds.

  1. Billionaire Bet

The stock is one of 30 U.S. companies tracked in an equal-weighted index selected from the portfolios of 10 asset managers with a personal net worth of at least $1 billion.

  1. Capital Strength

The stock is part of a strategy that seeks to outperform the market by selecting companies based on the strength of their balance sheets, long-term debt ratios and return on assets (ROA).

  1. Momentum Factor

The stock is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

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Recommendation

So buy Apple Inc. (AAPL) at market today and place your stop at $133.00.

If you want to play the options, I recommend the AAPL September $145 calls (AAPL170915C00145000), which last traded at $6.40 and expire on Sept. 15.

Portfolio Update

You stopped out of Adobe (ADBE) on June 27 at $142.65 for a 10% gain.

Your remaining Boeing (BA) August $190 calls (BA170818C00190000), are up 134%. Since you already sold half for a 140% gain and we still have time on these, I am recommending that you hold on to these for now.

Sincerely,

Nicholas Vardy

Nicholas A. Vardy

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