Recently, Tim Cook, CEO of the company Steve Jobs built, noted that he would
on secrecy. Of course, an increasingly uncritical gaggle of AAPL bulls applauded the statement, complete with accompanying fist pumps and chest bumps.
While it's nice to turn your brain off once in a while, the best times generally do not come at critical stages in the life of an investment. That's where we are right now with AAPL. The stock will either hit the lofty price targets
set for it or not. I lean toward not.
Bulls are ignoring the importance of iTV
Apple's stock price. Plenty of questions
. And I am not sure Tim Cook has the answers, which might be a better explanation for his cloak of secrecy, rather than Apple tradition.
The questions surrounding iTV. And whether or not, Apple scrambles for answers in a world without Steve Jobs. It's the one thing AAPL bulls as well as company executives do not want to talk about. In fact, they generally blow it off by discounting the importance of iTV or spewing some talking point straight out of a corporate press release.
Of those questions, how Apple will handle content acquisition and partnerships, assuming this new device even requires such arrangements, presents as the most vexing. By most accounts, these talks are not going well, as noted in an article at
The major content providers have absolutely zero incentive to cooperate with Apple on content deals. In fact, Apple barely ranks a step above
in this regard.
Frankly, if exclusive or special content pacts form a key part of iTV's foundation, this thing could end up being little more than a $2,500 glorified extension of the iTunes platform. After schooling the music industry, Apple rarely operates from a position of anything other than strength. That's not the case here. The Hollywood and Manhattan sports and entertainment establishments watched the music industry change. They're not about to let the same thing happen in television, particularly because of a device that has a good chance of being a relative flop.
Dividend Payers With Leverage Over Apple
When I invest in dividend stocks, I pay little attention to yield. In fact, I rarely look at it. As long as a company continues to increase its dividend, I prefer a decreasing yield. That just tells me the stock price has gone up.
And I want to look at companies that have leverage over the Apples of the world. Big media has what Apple and so many others need -- content. Because of this,
Content companies will not see any damage whatsoever to their bottom lines if they do not cooperate with Apple. They can, however, enhance it by ripping Apple off like they do Netflix. There's no reason to give premium content away, however, when you can monetize it through existing and even more lucrative channels.
my article history
. You find bull cases for several companies, including dividend payers
Two others provide equally as attractive long-term opportunity.
Comcast (CMCSA) - Get Comcast Corporation Class A Report and Disney (DIS) - Get Walt Disney Company Report
In so many ways, these companies are incredibly similar. Comcast and Disney pay almost identical dividends at 65 cents and 60 cents a share, respectively. Both companies have a history of increasing their dividends. Both stocks are up nicely over the last year -- about 30% for CMCSA and 23% for DIS. Each now flirts near its 52-week high.
The businesses are similar as well. Comcast and Disney have something so many companies do not -- diverse operating segments that hedge one another.
its business down into five segments:
Cable Communications: the cable and high-speed Internet business
Cable Networks: includes USA Network, CNBC, NBC Sports Network and Golf Channel
Broadcast Television: primarily NBC and Telemundo
Filmed Entertainment: Universal Pictures
Theme Parks: Universal Theme Parks in Orlando and Hollywood
It's pretty incredible when the "other" category includes an NHL franchise (the Philadelphia Flyers), Wells Fargo Center in Philadelphia and facilities management and concession services companies.
its business into five segments:
Media Networks: includes the ESPN channels, the Disney Channels as well as nine others, not to mention local and national television and radio stations and networks
Parks and Resorts: Disney-themed parks and resorts across the globe
Studio Entertainment: movies, television
Consumer Products: retail sales based on Disney characters, etc.
Interactive Media: online and offline games including Club Penguin and 2011 titles such as "Cars 2"
Throw Time Warner into the mix and you have the owners of practically every remaining piece of premium content -- particularly key sporting events ("appointment viewing") -- in the U.S. Enter Rogers and Bell and you have five companies controlling much of the content that matters in two countries.
To claim that these types of entities have leverage over Apple and others in content discussions is an understatement.
As investments, I'm not sure how you can go wrong when you put the synergistic parts together. I like investing in baskets of stocks. While
, the media space breaks that rule.
I cannot think of five better stocks to help form the foundation of a long-term portfolio than TWX, RCI, BCE, CMCSA and DIS.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
At the time of publication, the author was long BCE, RCI and TWX