Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apple Inc. (AAPL), Berkshire Hathaway Inc. (BRK.B) and QUALCOMM, Inc. (QCOM): David Rolfe’s Three Biggest Positions

David Rolfe, the portfolio manager of Wedgewood Partners, has been generating a decent annualized return of 11.5% for his investors for the past twenty years, beating the S&P 500’s annualized return of 8.2% during the same period. With around $2.2 billion in total assets under management, he holds quite a concentrated portfolio. His three biggest positions are Apple Inc. (NASDAQ:AAPL), Berkshire Hathaway Inc. (NYSE:BRK.B) and QUALCOMM, Inc. (NASDAQ:QCOM).

Apple Inc. (AAPL)A Buy or a Sell?

Apple Inc. (NASDAQ:AAPL) was the biggest position in his portfolio. As of December 2012, he owned 401,515 shares of Apple Inc. (NASDAQ:AAPL), accounting for 9.9% of his total portfolio. In the second quarter earnings results announcement, Apple Inc. (NASDAQ:AAPL) said that it would return as much as $100 billion to its shareholders in both share buybacks and dividends. The dividend increased to $3.05 per share, whereas the authorized buyback amount rose by $50 billion to $60 billion. Moreover, Apple Inc. (NASDAQ:AAPL) has issued $17 billion in bonds with a very low cost to finance its capital allocation plan. After that, Apple Inc. (NASDAQ:AAPL)’s share price shot up by 16%, from $390.50 per share to as high as $453 per share.

Goldman Sachs Group, Inc. (NYSE:GS) has rated Apple as a buy, and said that the recent significant rise in Apple’s stock price has been just a delayed reaction to its $100 billion capital allocation plan. Goldman Sachs Group, Inc. (NYSE:GS) also thought that a $17 billion bond issuance might make the market reaction more intense. Goldman Sachs’ Bill Shope has recently also rated Apple as a buy with a price target of $660.

Famous hedge fund manager David Einhorn also stated that he added more Apple positions in the first quarter 2013. He felt bullish on Apple’s new capital allocation policy and its innovative capabilities:

This vastly more shareholder-friendly capital allocation policy is a dramatic shift from where AAPL stood just a few months ago. We have added to our AAPL position. We now await the release of Apple’s next blockbuster product.”

Apple is trading around $440 per share, with a total market cap of $412 billion. The market values Apple quite cheap at 6.7 times EV/EBITDA and only 0.55 times PEG.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.