“Tim Cook and Luca Maestri are literally buying back Apple shares as fast as they can. When comparing the pace of Apple buyback over the past six months to that of the program’s previous three years, it is clear that management made the decision to be opportunistic to take advantage of Apple’s languishing stock price,” Neil Cybart writes for Above Avalon. “Apple management is showing an increasing level of confidence in its future.”
“While everyone quickly focused on iPhone unit sales growth guidance and clues about Apple Watch sales when Apple reported 4Q15 earnings, one data point that jumped out at me was the amount Apple spent on share buyback,” Cybart writes. “Management bought more shares in the open market last quarter than any previous quarter. In fact, when looking at the past six months, including the most recent ASR (accelerated share repurchase program), Apple bought back $24 billion of its shares, which is a record for any six-month stretch. All of this is made even more remarkable when considering that Apple’s stock price is more than 60% higher than when Apple began buying back its shares in late 2012. This shows management remains quite optimistic about Apple’s future and value found in Apple shares at current price levels. ”
“Tim Cook and Luca Maestri are likely becoming more confident in Apple’s future when looking at iPhone’s position in the smartphone industry. The ability to entice Android smartphone owners while serving as an aspirational brand causing consumers to strive to move up to iPhone’s price layers represents a long-term positive. In addition, while this may be just a coincidence, Apple management increased the pace of buyback in February 2015, around the time reports came out depicting Project Titan and Apple’s growing ambitions with electric cars,” Cybart writes. “We are seeing a management team that is betting big on a future that the stock market is still unable to see.”
Tons more, including informative charts, in the full article – highly recommended – here.
MacDailyNews Take: When hundreds of millions are upgrading their high-margin iPhones every 12 months, it’s tough to not be extremely confident.
Keep buying, Apple, while the buying is so good.