“Apple stock notched an all-time high on Tuesday, its eighth in the last 10 trading days,” Patrick Seitz reports for Investor’s Business Daily. “But a report predicting that Apple’s next capital return report will underwhelm gave investors caution.”
“Apple shares rose nearly 0.5% in morning trading on the stock market today, to peak at 133.60. But the stock reversed and ended the day down a fraction, at 132.17,” Seitz reports. “UBS analyst Steven Milunovich said Apple’s next capital return program could be less than expected. ‘Most appear to expect a large, multiyear program based on rising operating cash flows,’ Milunovich said in a research report Tuesday. ‘We believe a muted increase and shorter completion period are possible due to potential U.S. tax reform, increased dependence on debt issuance for buyback funding, the stock’s higher multiple, and greater domestic capex requirements. The repurchase amount could be as low as $20 billion over one year.'”
Read more in the full article here.
Related article:
Apple on track to buy back 20% of itself by 2017 – February 24, 2015
“The repurchase amount could be as low as $20 billion over one year.”
That’s chump change. I had better sell my AAPL now before it increases in value… /s
Stupid reasoning. Stocks often go down after hitting multiple highs because some stockholders turn their unrealized gains into “real” profit. Maybe they need to buy a car or house, or have some cash to pay for a gold Edition Apple Watch. 🙂
I don’t understand the attractiveness these “analysts” see in doing stock buybacks, when AAPL is already on a major upward trend. It’s a waste of money to intentional take shares off the market and reduce the number of shares outstanding, when there is already a high demand for shares. The high demand to own AAPL is why it’s going up.
The fact that Apple is likely to NOT waste its money doing unnecessary stock buybacks is a GOOD thing. That money does not “expire” because it’s not used. It remains a key resource, backing up the AAPL share price. It means that about $30 per share is pure cash, and the ongoing business of Apple is currently being priced at about $100 per share. What a bargain… This news is a positive for AAPL.
It also means, though, that an incoming investor has to “cover” the $30 first before participating in the ongoing business. In other words, less bang for the buck. I am not, by any means, advocating that Apple get rid of that cash, but it does reduce the leverage on the investment.
(I think having a lot cash is a good thing. It lets them, for instance, try out new ideas internally without undue concern for the cash cost of doing so)
“Capital Returns concerns” is just another load of bullshit that “ANALysts” gen up to fool the public and the big investors. I’ve been invested in AAPL since 1997 and, like most other long term holders, fretted when the stock took a dive, but I refused to join the “Chickenshit Brigade” to sell and stuck with it. Haven’t done all that bad!! Yeah, okay, today wasn’t so spiffy but, hey, us “Longtimers” have another day to live and look for the best….Jack
It amazes me how panic oriented some investor are.
One OPINION or manipulation attempt from a so called ” analysts” And they dump their stock?…
These people should not be in this game !
Just because the article says that’s why it went down doesn’t mean that’s the real reason. Often the reason is unknown, but that doesn’t stop them from “explaining” why a stock moved.
Lazy financial reporting is rooted in the fallacy that correlation equals causation.
Could not agree more!