“When it comes to Apple, the company’s products obviously are the most important item, but Apple’s financial results are scrutinized quite often,” Bill Maurer writes for Seeking Alpha. “One of the biggest issues I’m constantly asked about is the company’s cash position. Apple’s large cash balance has enabled the company to restart its dividend program and buy back tens of billions of dollars worth of stock. Over the last year, the cash issue has got more interesting, and in my opinion, has become perhaps the most important issue with Apple currently.”
“Apple’s cash pile is becoming an even more important item with each passing quarter. The company’s foreign cash balance continues to skyrocket, with no repatriation in site, an issue most US tech companies are facing,” Maurer writes. “Apple can borrow against these funds, but interest costs are rising for the company. The strong buyback will continue through the end of 2015, at a slight cost to the dividend. Once we get into 2016, Apple investors must prepare for a substantially lower buyback unless US tax law changes or Apple decides to start repatriating and paying Uncle Sam.”
Maurer writes, “Either of those scenarios would further cement the long thesis. At least for the indefinite future, Apple’s strong capital return plan is a reason to own this stock.”
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