“Now that Apple is no longer a high-growth company, it may be time for it to stop hoarding cash and return more of its still-ample earnings to shareholders through dividends and share repurchases,” Andrew Bary writes for Barron’s. “Either move could help Apple shares, which tumbled 12%, to near $440, last week, 38% below their record high of $705, hit in early September. Apple is the S&P 500’s biggest percentage loser this year. Apple (AAPL) looks cheap, despite analysts’ profit-estimate cuts for its 2013 fiscal year, ending in September. Apple’s P/E is just seven, when the company’s $137 billion, or nearly $145 a share, of cash is worked into the equation. Cash, which rose by $16 billion in the quarter, accounts for more than 30% of Apple’s stock-market value.”
Bary writes, “Only in the technology sector do companies hold so much cash, and Apple is the champ, with more than twice as much as No. 2 Microsoft. Tech outfits view cash as a security blanket, and Apple’s struggles in the 1990s have made it especially conservative. The cash could hit $200 a share or more by the end of its fiscal 2014. Investors don’t give Apple full credit for it, however, partly because they doubt they will ever get it.”
“‘There’s a strong belief among investors that a higher return of cash is warranted,’ says Toni Sacconaghi, a technology analyst at Bernstein. He argues that Apple should ‘significantly increase the dividend’ to 3% or more. ‘The real magic number is 4%,’ which would mean an annual dividend of about $18 a share, which could boost the stock by attracting income investors,” Bary writes. “Says David Rolfe, chief investment officer of Wedgewood Partners, a Missouri investment firm that holds the stock: ‘Apple is a broken growth stock, but it’s not a broken growth company.’ Still, broken growth stocks tend to trade at low valuations. When Apple was the world’s biggest growth story, dividends didn’t matter. Now they do.”
Read more in the full article here.
MacDailyNews Take: These calls for increased dividends and/or buybacks are only going to increase until Apple smashes The Street or, better yet, revolutionizes yet another multi-billion dollar industry.
We don’t envy the pressure Tim Cook is going to have to face until then.
Get institutional investors out of the stock. Apple’s institutional ownership is WAY WAY WAY too high and they are ruthless, money-grubbers. Apple’s share price is as key a product of the company as iPad, iPhone, iMac, etc. They need to innovate here and make the stock for the people, not for fund managers.
Take the Compneh private.
Actually its just idiot bloggers like the above.
““Now that Apple is no longer a high-growth company, it may be time for it to stop hoarding cash and return more of its still-ample earnings to shareholders through dividends and share repurchases,”
See what I mean. No idea of what he is talking about.
Also “Tech outfits view cash as a security blanket, ” Yeah cause Apple really has no use for the 8-10 billion it spends each year for advance purchases for critical components etc.
This guy is just spouting what other bloggers have said.
Just a thought.
Buy back 10 billion worth Monday am.
WS wants another sculley in there to pillage the company.
Steve jobs was right, no amount of dividends will satisfy the shysters. WS wants buybacks. They make thirty basis points per transaction. If they own the buy and sell they make 60 basis points. In turn they will use the proceeds to gouge the public by playing the commodities market.
There is no call for google to do it because schmidt wines and dines them or invests in the dark side of private banking. Crooked is as crooked does. For those who will say they are the biggest investors in apple, baloney. The investment money is their clients whom they are ultimately screwing.
there’s a light side of private banking?
This is a ploy.
Worth repeating:
Wake up Apple heads
Don’t you see that they sent in the bigots to disrupt your heads and stir up shit in MDN where they just spout hate and poison and talk shit because they don’t have a clue about anything that has finesse, or excellence, or genius, or class. They can’t stand to compliment, when due, or respect and revere and give due when they see it, they never do because they think it excludes them, so they hate.
MDN is a site that has become a national enquirer of sorts since it welcomed the tp mentality (and may have even encouraged it,) but when controversy attracts readers (amongst them anal-ists who come here to gauge Apple user sentiment) just because it’s frothing with controversy and it’s a place to spew, in almost every reader feedback …the impression that MDN Appleheads give the un Apple scanning visitor, has nothing to do with Apple. It is a mirror of the poisonous bi partisan political ramble that is destroying the fabric of this great country and it is all that’s alive and sick in an opportunistic Apple news website and is probably directly affecting analist sentiment and fanning the flames of Apple haters….
Think this might have anything to do with the fabricated, unfounded and mean spirited attacks on Apple since it’s last, unheard of, record shattering, world record earnings???
Think the biggots are here deliberately as tools, or have they managed to do what Samsung and Google and Microsoft and the Telcos, etc… haven’t to date? Is this what they’ve reduced MDN and Apple to?
Tink Diffrent
Funny since Apple is actually poised to take more business from Samsung in smart phones (especially in China) and TV’s. Samsung is warning investors it’s own high growth will be attenuated going forward but I believe Apple is still in high growth mode. Windows 8 and Blackberry phones will continue to be rounding errors. Game over when a 4.7 or 4.8″ iPhone arrives and addresses the boogie board phone crowd. Not to mention I believe will be a huge spurt in improved and advanced iOS software, without Scott Forstall there to muck up the works. (I hate turning on someone who had Jobs approval but Apple Maps – really Scott? Couldn’t you have just released it as beta? Didn’t you realize how unforgiving the world has become, even if you’re Apple?)
And take away business. As in components purchases.
not only 4.5″ or 4.8″ screen iPhones, but release NEW IPHONES
same time as Samsung releases new galaxy S phones around
summertime with software update.
Dividends is like burning money. Throwing it away. Let Wall St. eat itself and let the market cap game be theirs, but keep the money in the bank, that’s the real stuff, everything else is manipulated funny money. As long as you have sales, and money in the bank, let Wall St manipulation live in it’s own world, don’t allow reality and Wall St. bullshitting sit side by side and allow your company to be swayed by it when you are sitting on a shit load of money that allows you to ignore it.
bingo. fsck ’em.
NO BUY BACKS!! CONTINUE MAKING REAL GREAT PRODUCTS MAKING REAL SHITLOADS OF MONEY, WALL STREET WILL NEVER LIKE THAT PLAN.
The shysters want the buybacks. If apple does 40 billion in buybacks, that will be 240 million in fees (60 basis points) which they will turn around and use in the commodities (20x leverage) and forex (100x leverage). For every 1 percent move in commoditity prices they would make 20 percent on that money. On forex every 1 percent move, they will make a100 percent.
List AAPL shares in CHINA OR HONG KONG Stock Exchanges
Chinese there got a lots of money to invest too other than buying
Apple goods.
How much more cash does Tim need to hoard before he can buy back all the shares and take the company private?
He currently has a third of the money needed to do that I believe.
Doesn’t quite work that way. The cash Jord belongs to the shareholders just as much as the rest of the company does.
The money needed to take the company private has to come from outside the corporation.
This current bear raid has a lot to do with large investors wanting Apple’s cash by way of dividends or buyback to increase per-share-value. Anyway there has always been a negative narrative on Apple, since Wall Street prefers and thinks it understands ugly boring things like msft and dell. This company has only ever held off that negative narrative with blowout earnings and new products. Where are the new products (not upgrades)? I know Tim keeps saying Apple is busy inventing the future, but it would be nice to see some of that future. Any time now.
“Now that Apple is no longer a high-growth company…”
Let’s see…AAPL 18% growth, no longer a growth stock.
And then..GOOG 19% growth, and it’s a GROWTH stock.
I say do a bigger buy back.
Apple will always earn more cash, but we’re never going to see it this low again.
This article starts by saying Apple is no longer a growth stock? Its growing like mad and will continue to do so. Absolute bulls**t! And MDN’s take is a load of sh*t, too. Tim is not under any more pressure than before – he’s just doing what he was doing before and trying to ship the best products out there. How has that changed? Why would AAPL change their “laser focus” because some funds are clamoring for a bigger dividend?
Screw that. Keep focusing, Tim, and thanks for carrying this great company forward regardless of f*c*tards with their blogs and comments about how AAPL has lost it’s innovative edge and how Samsung is winning. Utter bullsh*t. With a single well-conceived entry-level smartphone with decent margins and the iOS ecosystem, you can rip the flimsy stool right out from under Android, and then all the shorts and the hedgies will lose their f**king money and their minds.
I’ll be the one to say this to Toni Sacconaghi:
Go fuck yourself, you greedy prick.
Sacconaghi, and others like him, want to destroy a great company. They are like pigs at the trough, fat and lazy, snorting profits like addicts. Sacconaghi led the wails for Apple to issue a dividend, and the day that happened, fund managers and hedge funds took control of Apple’s destiny. It is proven that stock buybacks have a short term effect at best, and are a poor use of capital. It is little wonder why Warren Buffett does not allow for dividends or buybacks.
This is nothing more than a shakedown by Wall Street. With a third of the company’s value in cash, the pigs on the $treet are valuing Apple as if the company is about to go out of business.
That said, I’m sure some retard will show up on CNBC this next weekend to say that very thing. And the blogs will go crazy with that.
This isn’t a sell-off. It’s a gang rape. Wall $treet pundits will stick their cocks in any orifice they can. Greed, greed and more greed.
Shame on you, Wall $treet. Go fuck yourselves.
Well said, Ed.
Took the words right out of my mouth.
Is it time to SIDAGTMBTTS?
Or should we wait until the $300/share mark!
We could wait until $300 (which won’t happen), and who could afford a hostile takeover of Apple, even then? It would take a heck of a lot of borrowing to takeover Apple, that’s for sure.
Apple is still a growth company. People will come to their senses eventually. Even when Apple’s growth trends down to “normal” levels, it will still be raking in the cash.
I don’t believe they should buy back stock any earlier than Monday morning 6:30 AM PST. The same goes for announcing an increase in the dividend.
lol… screw your buy back/dividends. Don’t let these manipulators win Apple.
How’s that?
Tim Cook’s big mistake, dividends in the first place -F- wall street manipulation.
Get used to Apple being smart. They aren’t dupes to the dumbass GreedTards of Wall Street.
Dear Apple: DO NOT CHANGE. Stay excellent in business and innovative tech. Let the anti-Apple analysts, trolls and HATERS simmer in their own anxiety. It has nothing to do with you.
“Now that Apple is no longer a high-growth company”
Wrong. Apple is a combination high-growth/value stock that has never been seen before, and this is freaking the hell out of stock traders.
Apple hopefully will tell the investors to go FUCK THEMSELVES!
Apple didn’t even give out dividends at all before so they should be happy with whatever they get. Apple has been screwed by the market this whole time always being under valued and now double under valued so why should Apple give back more to the people who screwed them over. Don’t do it Apple.
Demands? And what will the investors do if Apple doesn’t comply with these “demands”—jump up and down and wet themselves?
These dumb arses forget that apple has already initiated a 10 billion dollar buy back, they have not bought any shares back yet but the press release stated that it would mostly occur in 2013.
Here is the press release: http://www.apple.com/pr/library/2012/03/19Apple-Announces-Plans-to-Initiate-Dividend-and-Share-Repurchase-Program.html
From the third paragraph of that press release:
“Additionally, the Company’s Board of Directors has authorized a $10 billion share repurchase program commencing in the Company’s fiscal 2013”
The only reason apple did not anounce guidance for the coming quarter is because there waiting for the stock to go as low as possible so they can buy more shares back with that 10 billion.
Oh really! The Apple Bear FUD just keeps getting more hilarious:
Now that Apple is no longer a high-growth company
Amusing isn’t it that Apple broke yet-another income record. But babies will dry. Wha-Wha-Wha!!! 😥 Entirely ignorable. Success is the best…
Error: Please read: “But babies will CRY”
… and whine, and pout, and stamp their little feet, and sell their little stock shares, and throw tantrums, and act like the little spoiled brat bizTards they are. Boo-fracking-hoo.
Put on a bandaid and get to work, kiddies. Apple has kicked the ass of every company in the world, not just because of Apple greatness, but because of other company LAMENESS. Change that.