Panicked selling of AAPL lets Apple execute buybacks cheaply

Quite an impressive display of panic in the stock market this week has afforded Apple a golden opportunity to execute billions of dollars in buybacks, should the company so choose.

“Media-induced panic related to the coronavirus outbreak has caused stocks to crash in value, with Apple’s share price dropping to levels not seen since early December, back before it was appreciated how well Apple’s iPhone 11, wearables, services, and other offerings had performed during holiday sales,” Daniel Eran Dilger for AppleInsider:

Apple’s quick action to buy back billions of its shares at a discount after irrational stock dips have repeatedly occurred over the past decade. In both 2013 and 2014 the company scrambled to buy double-digit billions worth of Apple stock after tech media sources repeatedly depicted its record sales as “disappointing.”

That history continued into the most recent holiday quarter, when Apple’s chief financial officer Luca Maestri detailed efforts to buy up tens of millions of shares at an average price of $250 before those shares began climbing north of $325 this month.

Apple wasn’t driven up into a bubble valuation. Even at its peak, its price to earnings ratio was far smaller than Google, Microsoft, Amazon, or other peers in technology. So the massive drop in Apple hasn’t been the result of a rational reevaluation of Apple’s value. It’s just yet another media-induced panic that allows Apple the opportunity to further concentrate the value of its share via stock buybacks.

MacDailyNews Take: Spot on. Enough with the media-induced FUD, already! (Just, first, can we get a sub-$250 dive, pretty please?)

Be fearful when others are greedy. Be greedy when others are fearful. — Warren Buffett