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Even stock guys like Apple bonds

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05/03/2013 | 10:35am CEST




ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Now, you like tech in general. You are an equity guy, but can you make the case for an Apple bond?

BOB TURNER, CIO, TURNER INVESTMENTS, (ENGLISH) SAYING:

If we were buying bonds, we'd certainly buy the Apple bonds. I think they're as safe as anything out there. From an equity perspective, I really do feel like this was Apple signaling a big change in their business. You know, forever they had been this hyper-growth company, and just, naturally things do slow down. The smartphone penetration does get, works towards saturation. So for them, it was really just saying, 'We still have growth but not as much, and therefore, we're going to return some of the capital to shareholders through yield and through share buyback.'

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Now, since you own Apple, do you think of the stock differently in terms of is it less attractive to you? Is it more attractive? Would you add to your positions?

BOB TURNER, CIO, TURNER INVESTMENTS, (ENGLISH) SAYING:

Well, near-term to intermediate-term, I think the risk reward is good, you know, with the 3% dividend yield, buying back $60 billion worth of stock which is just really staggering when you think about it. And importantly, nice product introductions ahead. The 5S, potentially a low-priced phone, the watch, the TV contract with China Mobile. Those are all nice drivers moving ahead. So the risk reward, I think, is very good here. Saying that Apple is no longer the stock that you just say, 'I'm going to put it away for several years and I'll do okay,' you'll probably do okay but there's probably better growth opportunities elsewhere.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

And now, one area you like is basically some equipment names that are going to benefit from this big move to mobile like all the Apple devices and everyone else's device out there. You've identified a couple of companies and I know some investors might not be familiar with them. So let's run through some of the stocks you like. Ruckus Wireless is one of them.

BOB TURNER, CIO, TURNER INVESTMENTS, (ENGLISH) SAYING:

Sure. The amount of data that's being transferred out there is explosive. I mean, there are five or six billion cellphones or a billion tablets, ultimately, there's going to be tens of billions of connected devices. So somehow, that traffic has to be dealt with. Ruckus is one that does that. They offer wireless offload capabilities, mainly the carriers. Now there are those companies that do it for you and I in our home but they sell their equipment directly to the carriers such as the carriers can offload some of those traffic through wireless capabilities as opposed to having all of it clog up the network. So that's the attraction to Ruckus.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Another one you like is Aruba Networks and this one has a play that you call like BYOD. It's sort of like BYOB, but it's 'bring your own device.' So how does that work with this company?

BOB TURNER, CIO, TURNER INVESTMENTS, (ENGLISH) SAYING:

Yeah. Now Aruba's target market is more enterprises, you know, big corporations like a Procter & Gamble or smaller organizations like ourselves. Everybody has the Wi-Fi hot spots, the restaurants have it, the retailers, so there's a lot of growth there. And Aruba really has the best solution. It's kind of a robust enterprise sort of solution for these Wi-Fi hot spots but it's reasonably priced as well. So their main competition up to this point has been Cisco but it does seem like Aruba has kind of a better price point and a more robust offering. And there could be the argument, gosh, everybody has Wi-Fi hot spots but they still think there's a lot more room to go and then they need to upgrade them as well. So for example, Starbucks is in the midst of upgrading all their wireless hot spots.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So another name in the space is Finisar. This one's stock chart is a little bit different, it's a little bit choppy in terms of its past performance. So it's more on the dip side. I don't know if now is the time to buy it, but what's the cause of the inconsistency there and does that smooth out going forward?

BOB TURNER, CIO, TURNER INVESTMENTS, (ENGLISH) SAYING:

Sure. Well, it's a very cyclical industry that they play into the optical industry, so their end customers are companies like Siena, Alcatel Lucent, Juniper to a degree. And the carriers do need to upgrade their network. The carriers being AT&T and Verizon because again, there's so much data traffic, and one way to do that is to put a very robust piece of optical equipment from Siena or Alcatel Lucent, and Finisar is a company that supplies in the components. So the carriers tend to have choppy spending. We do believe they're in the midst of a big upgrade cycle for optical spending. So the equipment companies will benefit and then kind of the further down on the food chain are the component companies like Finisar. So it's the type of company that you want to buy when things look really horrible and then acknowledge you do have to sell when things are going good.

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