“Lately, there are a lot of discussions about whether Apple (AAPL) should increase its proposed buyback program in order to reward the investors more,” Jacob Steinberg writes for Seeking Alpha. “In the recent months, despite the strong rally in the highly-inflated market (thanks to the QE), Apple continues to be deeply discounted. When deciding whether a company is cheap or expensive, one could say many different things by looking at many different metrics. There is one thing that’s for sure though: if a company is cheap enough to buy itself, that company is probably a good bet.”
“Buybacks or not, Apple is likely to have a balance sheet strong enough to go private, if it chose to do so. This is especially true if the investors continue to ignore Apple’s achievements and keep the company deeply undervalued,” Steinberg writes. “In 2012, Apple’s operating cash flow was $50 billion. In the best case scenario, Apple continues to grow its operating cash flow at an annual rate of 15%. This would increase the company’s operating cash flow to $57.5 billion in 2014, $66.13 billion in 2015, $76.05 billion in 2016, $87.45 billion in 2017, $100.56 billion in 2018, $115.65 billion in 2019 and $133 billion in 2020. Combined together, the company would generate about $680 billion in operating cash flow between now and 2020. Add that to the company’s current cash balance of $150 billion, and the company would have more than enough cash to buy itself out and become private.”
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