“Make no mistake, the smartphone market is massive,” Chad Henage writes for The Motley Fool. “I found that IDC research expects 918 million smartphones to be sold worldwide in 2013. As of that research, Apple had the 2nd highest global market share at about 14.9%. If IDC is correct, and Apple only maintained its current market share, the company would sell 136 million iPhones this year, or about 34 million a quarter. The fact that the company just sold 37 million shows they may do better than this average.”
“The second reason investors should consider Apple’s stock is the company’s dividend increase may attract some yield hunters… Investors who wished Apple would pay a better dividend so they could invest are getting exactly what they want,” Henage writes. “The third positive is, the significance of Apple’s share repurchase plan. The company expects to repurchase as much as $60 billion in stock over the next two years. At current prices, and assuming the company splits this into $30 billion per year, the company would retire about 8% of their diluted shares each year. If you think about it, this means even if Apple showed just a 10% increase in net income, their EPS would rise by 18%.”
Henage writes, “Fourth, until the company uses a truckload of their cash, the stock actually has a higher percentage of net cash to market cap. than most of their competition. In fact, with $144.69 billion in net cash and investments and a roughly $383 billion market cap., 37.70% of Apple’s value is cash on the balance sheet… The bottom line is, even if Apple’s growth was cut in half, between the higher dividend, and significant share repurchases, shareholders should be well rewarded. Once the company takes the wraps off, ‘some amazing new hardware, software, and services’ that CEO Tim Cook referred to, today’s price will seem like a steal… From now until around June, investors may have a chance to buy Apple at these prices. After that, don’t expect to see these prices again.”
Much more in the full article here.
Apple shorts have been neutralized, by Apple’s latest financial moves. Apple has ony shown some of it’s cards to this end.
Looking back in two years time if not sooner), tim Cook will be looked to have pulled a hell of a rabbit out of his hat by showing Apple to still be a growth stock in addition to it’s ‘new found’ value stock box.
Apple bonds will be hotter than July…
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Are the Analwipe-ists done screwing around with this stock now so I can buy back in? (At a loss of course after I chose the worst time to chicken out and sell, trying to protect what little was left towards my next car in a few years)
In a word: “no”. I’ve told you this before in a reply to you before so I won’t repeat myself. Invest in stock market shares as if you are prepared to lose it all.
Point well taken. But I don’t think it is totally wrong to have a point where you reach a limit of how much you are willing to bleed and still have enough blood left to survive. I don’t think you have to lose it all when you’ve already made a lot of money even selling at $400 if you bought between $13 and $100.
If Steve were alive and well, nothing would scare me to sell. Those left behind are doing OK, but they’re still learning to steer the ship alone. Methinks there will be trial an error here and there, and that is what we see now. Not everyone walks on water as Steve did, nor do I expect them to.
OK, I caved in and bought back my shares yesterday at about $440. Got sick of that empty feeling without them, and it looks like the worst is over. Although I lost a share or 2 waiting but I feel more confident that it might not be dipping below my “emergency money & car fund savings” level. Now I’m stuck for better or worse for awhile. I’ve only done this once before and let it shake out, so I took the big tax penalty a few years ago when Steve was in bad shape and the stock was wacky. I shouldn’t get hit too bad in April 2014.
Apple is trying to make a bottom hold here. We’ll see tomorrow. Clearly the bump up in the dividend and the increased share buyback program has helped. It will be interesting to see what comes of WWDC. The stock should start moving up significantly after that.
Although what Apple is doing now is nice, I still wish Apple could raise it’s share price value without having to resort to financial witchcraft. I would figure Apple just needs to sell more smartphones and boost its smartphone market share a positive direction. And, of course, get into a few side businesses involving an Apple search engine and some video streaming services.
“Apple’s share repurchase plan”
Is a negative. A waste of money that could be spent on R&D, products, supply chain, dividend increase not to support selling share holder who have done nothing for Apple.