“Apple ended the quarter with $137 billion in cash and investments, more than the GDP of many nations. (About $94 billion of this is overseas and would be taxed if repatriated, so some borrowing by Apple might be necessary),” Tiernan Ray writes for Barron’s. “The 37.6% drop in the past four months in market value of what had been the world’s largest company—Apple relinquished the title to Exxon Mobil Friday, a year to the date it assumed the mantle—is increasingly frustrating investors, so much so, many believe, that the company must give back a lot more to shareholders.
“Apple could have, for example, removed the sting of Wednesday night’s report with an increase in its quarterly dividend from the current $2.65 per share, a 2.4% yield. That’s not bad, and it’s certainly better than it was when the stock was at $700, but it pales beside the 4.3% yield on Intel’s shares. Even Microsoft’s long-criticized yield is 3.3%,” Ray writes. “Apple could have boosted its share buybacks, too, on which it spent just $2 billion last quarter.”
Ray writes, “It’s not necessarily wise, however, for Apple to heed the calls to unleash its cash. For one thing, cash doesn’t necessarily have a multiple of zero, as Gundlach suggests, when it’s in the hands of a company that can sell nearly 50 million gizmos at around $600 a pop in three months… Although we’ll probably see a protracted period of hand-wringing about the cash, at some point the focus will return to the fact that Apple can and still does surprise with very good products, of which it sells gazillions.”
Read more in the full article here.
MacDailyNews Take:
1. If you think Steve Jobs left those in charge of his life’s work with bupkis, you’re a fool.2. If you think the people at Apple, including Jony Ive, were just hangers-on riding the Steve Jobs train and now its all just sitting, rusting on the tracks, you’re a fool.
3. If you say either of these two things, but don’t believe it, you’re a stock market manipulator.
4. If you wish Apple simply had their iMacs ready when they were supposed to be ready and not two months late, thereby missing out on approx. 1+ million holiday quarter Mac unit sales (which would have just so happened to contribute more than enough to beat the Street soundly), you’re probably long AAPL.
5. If you know anything at all about Apple product supply/demand, you know that Apple customers have proven they will wait. Therefore, you understand that sales of iMac, iPad mini, and iPhone 5 (all of which were constrained during the last quarter) will be pushed into this quarter, with its drastically lowered expectations, which means you’re thinking ahead.