As part of our Next Invest conference, Covestor’s Mike Tarsala recently spoke with Covestor manager Eric Steiman, who oversees the Undervalued Opportunities portfolio, about the danger of falling in love with stocks.
Steiman favors a cool, analytical approach to managing his holdings. He’s more than willing to take some money off the table when a stock is doing well–or cut it loose at the first sign of trouble. Nor is he shy about offering advice about one of the most widely held stocks on the planet: Apple (AAPL).
In a recent interview with MacNewsWorld, Steiman called for Apple to consider one of the following paths: a one-time $89 dividend; a double dividend; a one-time share buyback; or ongoing share buybacks. “They have too much cash, and are making too much on a quarterly basis to not repay their shareholders,” he said. In general, investors reward companies a premium P/E multiple if they use their cash in the best interests of their shareholders, according to Steiman.