“Apple Inc Chief Executive Tim Cook is in an enviable position – market leading products, a $98 billion warchest and a seemingly gravity-defying stock price,” Poornima Gupta reports for Reuters.
“The meeting this Thursday comes days after Apple touched a new lifetime high of $526.29 before receding slightly,” Gupta reports. “The stock may get a boost next month, when Apple is expected to unveil a new version of its best-selling iPad.”
Gupta reports, “Apple shares have seen a blistering rally in the past seven weeks, gaining $100 and making Apple the most valuable U.S. company, with $468 billion in market capitalization… A perennial issue that shareholders zoom in on is Apple’s enormous cash pile. The company now boasts of over $100 a share in cash and securities.”
“Apple’s cash balance is the largest among U.S. technology companies, and many analysts think the company should put at least some of the money to work,” Gupta reports. “The company last bought back shares in 2001 and scrapped its dividend in the mid 1990s. A dividend could give Apple stock a short-term boost as institutional investors – who typically own only stocks that pay dividends – may buy it.”
Read more in the full article here.
MacDailyNews Take: Surely Tim Cook can hardly wait for the usual barrage of self-serving jackassery.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
The last time I checked, roughly 70% of AAPL was owned by institutional investors. Most of the rationale presented by financial analysts is worthless. About the only consideration that makes any sense is that AAPL will become more attractive to income investors if it declares a regular (not special) dividend.
Personally, I am not enamored with dividends because I have to pay taxes on them. As long as Apple is making a good return off of those resources (and I know that they are doing better than I can) and using them wisely for strategic benefit, I don’t really care how big the hoard gets. If I need money from AAPL, then I will sell some.
I find it interesting how the advice flows when analysts, who have no accountability whatsoever, make recommendations about other people’s money. If they were smart enough to make those recommendations, then handling their own money should be a full-time job.
Wow KingMel…I couldn’t have said this better. WallStreet analysts are nothing but a bunch of armchair quarterbacks who, if they were truly as smart as they claim to be, would be doing something other than their current job. If Apple wants to sit on, and grow, a $100B cash pile, great! They’ve proven they know how to use their resources wisely.
My situation is one that would benefit from a regular dividend. I could use the extra income and have been trying to figure out at what price i should sell AAPL and switch to a fixed income type of investment. If apple were to pay a regular dividend of at least 2.5% i would hold the stock indefinitely. The question is how many investors are out there with the same situation as me and how many would buy the stock based on a regular dividend? One argument for paying a regular dividend is AAPL is a rare situation in that it would probably trade at a higher multiple if it paid a regular dividend.
“seemingly gravity-defying stock price”
A company with an undervalued stock, CANNOT be described as “gravity-defying”.
I know right? It’s trading at 9 times forward earnings how is it defying gravity? The big numbers cloud peoples brains.