“As we all have seen, Apple (AAPL) stock has been crushed recently. From an all-time high of $705 on 9/21/12, the stock has fallen precipitously and is now below $500 a share (a 30% decline as of today),” Jason Kaplan writes for Seeking Alpha. “Analysts have done their ‘channel checks’ and concluded that demand for the iPhone (Apple’s most profitable product) is not as strong as need be to meet or beat earnings expectations.”
“I do not believe that any of these analysts have a real idea what is going on in Apple’s supply chain. It is so vast and so complex that no one except Apple can be sure what component orders look like,” Kaplan writes. “The sell-side analysts are paid to speculate, and that is what they are doing.”
Kaplan writes, “I, of course, have no idea what earnings or guidance will be when Apple reports its financial results for the December quarter next week, but there are a number of things the Board of Directors can do to help stabilize the share price and even put a floor on it going forward.”
1. Apple should double the dividend payout
2. Apple needs to split the stock 10-for-1
3. Apple needs to buy back larger amounts of stock
“What would keep Apple from making these shareholder friendly moves? Well, first a large chunk of that cash is held off-shore for tax purposes and is not likely to be repatriated for payment to shareholders, barring a federal tax holiday… Another reason why Apple might not want to make these shareholder friendly moves is because the perception might be that the Company is no longer an innovator and that Apple has played its last hand,” Kaplan writes. “That may be true. What is the next great money maker for Apple? An iTV? Maybe the Company does not have one at this point, but so what? Its existing products continue to be best sellers and should be for many years to come.”
Read more in the full article here.
MacDailyNews Take: If we had a nickel for every time we heard “Apple’s best days are behind it,” we’d use the dump truck full of them to load up on some more AAPL stock. Do not underestimate Tim Cook and Co.
“I believe Apple’s brightest and most innovative days are ahead of it.” – Steve Jobs, August 24, 2011
[Thanks to MacDailyNews Readers “Arline M.” and “Brawndo Drinker” for the heads up.]