Since 2012, Apple has been buying back shares at the extraordinary rate of around $10 billion per quarter. A year ago it picked up the pace to around $20 billion per quarter. After a reprieve in the March quarter, the company has resumed its buyback frenzy with its largest-ever quarterly funding: $24 billion in the June quarter.
But why is Apple buying back shares seemingly regardless of their price? It appears clear that Apple expects its share price to grow much higher in the future. So rather than carefully timing its repurchases to only occur when the stock price hits its lowest levels, Apple continues to buy shares back nearly as fast as it can all the time, even as the stock price jumps up and down as it continues to increment higher.
Since 2012, Apple has now funded a total of $271.3 billion in stock buybacks. Most of these shares were repurchased at what would today be an incredible discount. While analysts have occasionally picked out a given trough in Apple’s stock price and declared that its buybacks were a huge mistake, it’s hard to imagine in hindsight how Apple could have better invested $271 billion of its past iPhone profits.
MacDailyNews Take: These are massive, unprecedented buybacks that continue to pay dividends (on top of actual dividends) to Apple shareholders. AAPL investors should be cheering for every share that’s retired!