“Apple’s cash horde is the stuff that legends are made of, particularly before the Mac maker initiated its capital return program and its money mountain never seemed to stop climbing higher,” Evan Niu writes for The Motley Fool. “Apple has boosted its capital return program twice now, with most of the increases being dedicated toward share repurchases. Yet, Apple can’t seem to give its cash to shareholders fast enough.”
“The capital return program has now nearly tripled over the course of 2 years. That’s what I call aggressive. At $130 billion, Apple’s program is larger than many mega cap stocks. Theoretically, you’d think that such a massive program would help Apple reduce its overall cash position as it works to give as much of that back as possible. After all, that was sort of the idea in the first place,” Niu writes. “You’d be wrong.”
“Apple simply generates cash faster than it can give it back. Back when the capital return program kicked off in Q4 2012, Apple had a total of $121.3 billion in cash. After factoring in the two separate bond offerings over the past two years, Apple’s current net cash position is $141.2 billion,” Niu writes. “If you add long-term debt to net cash, you get Apple’s gross cash position of nearly $165 billion. Apple’s net cash position is what’s important here though, since Apple’s use of debt is merely a way to avoid repatriation. Net cash has still increased by nearly $20 billion since the program started… Should Apple be even more aggressive with returning cash?”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]