Analyst: Apple Stock Buyback Likely

| Apple Stock Watch

AppleApple has bucket loads of cash on hand, and Morgan Stanley analyst Katy Huberty thinks the Mac and iPhone maker will use its bankroll to either for a stock buyback or to pay shareholders a dividend.

With more than US$76 billion in the bank, Ms. Huberty sees a $25 billion stock buyback, or a 2.4 percent dividend, as a reasonable option for the company. “We believe Apple is more likely than ever to return cash to shareholders,” she said, according to Bloomberg.

Apple hasn’t indicated that it plans to buy back any of its stock or pay out a dividend to shareholders. Instead, the executive team has said in previous months that it will use the money for “strategic opportunities.”

When he was still CEO of Apple, Steve Jobs pointed out that the company is disciplined when it comes to spending money, too.

Aside from some analysts thinking Apple should pay out a dividend, there isn’t any indication from the company that such a plan is in the works.

Apple is currently trading at $382.23, up 2.29 (0.60%).

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Or better yet, leave the cash in the bank for a rainy day. Screw the greedy shareholders. Unless you have millions of stocks which only the rich have, dividends aren’t worth anything.

John Molloy

Not. Going. To. Happen.


”... Morgan Stanley analyst Katy Huberty…” is obviously (IMO) not at all an expert on her subject, Apple.

?We believe Apple is more likely than ever to return cash to shareholders,? she said.

More zero is still zero, Ms. Huberty.

Apple’s likelihood of ever returning cash to shareholders will always be zero/naught/nichts, as long as Steve Jobs lives (here on earth, or in the hearts of the Apple faithful).

Jobs/Apple apparently believes that in order to be successful in its business, Apple’s first responsibility must always be to its product; NOT to its shareholders, not to its customers, not to its partners, not to its staff/employees, not even to the world/universe.  (What comes 2nd? NOT its shareholders, anyway - they’re probably not even 3rd.)  That philosophy has made Apple about the most successful company in the world.


Meanwhile, any shareholder who’d like to hitch a ride on Apple’s coattails, however, is quite welcome to do so (and will grow rich there according to his/her investment size).


Apple’s product depends upon the power of Apple’s sitting atop its “Scrooge MacDuck” golden hill in order to corner the market on parts & supplies, to immediately & cleanly acquire any other resources for product development, and to otherwise attract partners.  And to otherwise insulate it from vicissitudes.

Bosco (Brad Hutchings)

Well, they should definitely issue a dividend. Many tech companies have gotten away with not doing that under the guise of rapid growth only to eventually see downturns with some shareholders caught holding the bag. The dividend provides medium term guidance and holds management accountable to it.

But stock buybacks rarely make any sense except as a defensive move against hostile aggressors. They signal a management that lacks ideas about what to do with its capital. If that’s truly the case, management should just coast for a few years and not signal. The effect would end up being about the same, with the added bonus of potentially stumbling into the next good idea.

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