“Today, the last bear on Wall Street threw in the towel and upgraded Apple’s stock,” The Frugal Prof writes for Seeking Alpha. “Noted Apple bear raises price target to $160. Of particular note is the rationale for his (Toni Sacconaghi’s) upgrade: Plus, he added, Apple is poised to benefit “significantly” from potential changes in the laws for bringing back foreign cash. Though Apple has long had a mountain of cash on hand, investors now see it as more valuable, Sacconaghi said.”
“This is a common assumption by Wall Street analysts, that Apple will repatriate some or all of its $90B in cash from overseas and initiate a big buyback,” The Frugal Prof writes. “As one of the richest, most visible companies in the world, this is a high-profile political event both for the company and for the Trump administration. And the political uncertainty surrounding the details of the final ‘deal’ or agreement is anything but certain.”
“The political purpose of repatriating cash is to create American manufacturing jobs. The significant question for shareholders is how does a de facto tax break for one of the richest companies in America to do a stock buyback help President Trump? It doesn’t,” The Frugal Prof writes. “In fact, a stock buyback is designed to benefit one group: shareholders. Large shareholders who now include outspoken critic of President Trump, Warren Buffett. I expect this to be a negotiation, and potentially, a contentious one… At a minimum, the company will need to announce some type of large manufacturing move to the United States, and or other political concessions.”
Read more in the full article here.
MacDailyNews Take: Let’s Make a Deal!
(Just schedule the dealmaking session during a Ferrari BoD meeting.)
Apple’s Eddy Cue joins Ferrari board of directors – November 7, 2012