Apple Reportedly Preparing to Announce Larger Dividend or Stock Buyback

[MacRumors]

Quartz reports that Apple is moving closer to announcing a plan to return additional value to shareholders, likely acting "this spring" to either increase its dividend or repurchase additional stock from investors. The move comes amid increased public scrutiny of Apple's plans for its cash as vocal hedge fund manager David Einhorn has been pressing the company to return more money to investors.

Apple's zeroing in on a dividend or buyback was in the works before Einhorn made his complaints public in February, although some of the sources say Apple increased the size of its plan after Einhorn's comments. And although Apple CEO Tim Cook publicly called Einhorn's lawsuit a "silly sideshow," the company found his idea of preferred shares "interesting," sources said. If it decides against a share buyback, Apple could either raise its existing dividend, which the company started paying this year, or issue a special dividend.

Apple's existing plan announced a year ago involves a quarterly $2.65 per share dividend and a $10 billion stock buyback program intended to offset the issuance of new shares for employee compensation. That plan was projected to cost Apple $45 billion over three years, but the company's cash holdings continue to grow.

Just last week, Warren Buffett suggested that a stock buyback would offer the biggest impact for Apple given the fall in the company's stock price from a high of over $700 last September to $430 today. As long as Apple believes that its stock is undervalued at current prices, Buffett argues that if the company can "buy dollar bills for 80 cents, it's a very good thing to do."

Quartz's report suggests that an announcement regarding additional dividends or stock buybacks could come alongside a product launch, although Apple's plans for any potential product-focused events over the next few months remain murky. Apple would also likely prefer to separate any financial discussions from a product launch, giving full focus to the new products while scheduling a separate conference call focused on investors and analysts to discuss its cash plans as it did when it announced the current program last year.

Article Link: Apple Reportedly Preparing to Announce Larger Dividend or Stock Buyback

[daneoni]

I hope its a buyback

[samcraig]

I would imagine that any news in this regard would give a boost to the stock. Which wouldn't hurt.

[angrynstupid]

No brainer. Listen to Buffett.

[Brian Y]

So someone at Quartz has some AAPL stock they want to get rid of then?

[Rocketman]

Let's keep this simple. The next AAPL conference call is in late April, about a month away.

The next known product lunch date is WWDC early June.

AAPL should have a policy of a 2-5% annual increase in the dividend. No major impact to cash, but changes the calculus by income buyers.

They should buy back a bunch of stock but do so through Braeburn capital and its offshore holding companies so it is invisible in the shares outstanding figure.

Stealth.

Rocketman

[ViPhone]

AAPL really is a bargain right now....if only I had $40k to throw around.

[pixelpro]

AAPL Please don't give a special dividend. Instead do a stock buyback, and perhaps increase the dividend amount in future payouts !!!

[Yelmurc]

Coincidences are always around money.

http://blogs.wsj.com/marketbeat/2013...qtnews_wsjcomp

[omenatarhuri]

Originally Posted by pixelpro

AAPL Please don't give a special dividend. Instead do a stock buyback, and perhaps increase the dividend amount in future payouts !!!

Same here, with current prices it would perhaps make more sense to buyback.

[TallManNY]

Originally Posted by Yelmurc

Consequences are always around money.

http://blogs.wsj.com/marketbeat/2013...qtnews_wsjcomp

Okay. So haven't there been well respected academic reports that show that technical trading doesn't work. In addition, you know, to the fact that it just sounds crazy (flying wedges and death crosses and the sort). Can there really be enough folks using this voodoo and those folks have enough money that they can actual move a company the size of Apple?

[Judas1]

Apple stocks were ridiculously overpriced previously. This is the new norm. If I had money to spare, I would buy it at this price and hold. It a good deal and they are not going anywhere soon. But they are no longer a growth company. Nothing they come up with now will be revolutionary. Its the inevitable life cycle of a company.

[Rocketman]

Originally Posted by TallManNY

Can there really be enough folks using this voodoo and those folks have enough money that they can actual move a company the size of Apple?

I made a post well before AAPL hit 700 saying it would hit 445 and possibly 420. Both came to pass and both were based on purely technical trading. Gaps as a primary factor.

Look up my posts on it.

BTW another technical measure says it will go above 700 by the same margin as the ultimate bottom. Let's say the ultimate bottom is 420 and the top was 705. The difference is added to the top to give you 990. It might take 6-12 months to get there. You have dips in most stocks in May-June and August-September. You can trade on that. Even if you only do 4-5 trades a year, using options on the downside and stocks on margin on the upside. Keep a 5% trailing stop to be safe. Send me 10% of your net gains.

Rocketman

[slicecom]

Originally Posted by ViPhone

AAPL really is a bargain right now....if only I had $40k to throw around.

Not really, it was just ridiculously overvalued recently. They were a bargain 10 years ago.

[doelcm82]

Originally Posted by Judas1

Apple stocks were ridiculously overpriced previously. This is the new norm. If I had money to spare, I would buy it at this price and hold. It a good deal and they are not going anywhere soon. But they are no longer a growth company. Nothing they come up with now will be revolutionary. Its the inevitable life cycle of a company.

I remember when Apple was a computer company, making Macintosh computers. Using your logic, they were doomed to stagnate forever as a computer maker.

Then came the iPod, and Apple became a music company (and had to settle with that other Apple over the rights to use the name). Then came the iPhone, and Apple became a smartphone company.

They didn't have your attitude, so they weren't content to muddle along and accept the failure to grow as inevitable.

[Judas1]

Actually, now that I think about it, I see a lot of ways Apple stock can still slide downward. I can't really see a good upgrade of the iphone 5. With all the constraints they need to deal with like resolution, size, home button, iOS, they can't really do much. Or is that already taken into account with this current price?

[TC03]

Originally Posted by slicecom

Not really, it was just ridiculously overvalued recently. They were a bargain 10 years ago.

P/E is still very low, even for a non-growth company.

[Judas1]

Originally Posted by doelcm82

I remember when Apple was a computer company, making Macintosh computers. Using your logic, they were doomed to stagnate forever as a computer maker.

Then came the iPod, and Apple became a music company (and had to settle with that other Apple over the rights to use the name). Then came the iPhone, and Apple became a smartphone company.

They didn't have your attitude, so they weren't content to muddle along and accept the failure to grow as inevitable.

They became a different company. they went into music player, then mobile phone, then tablets. That's always an option, but its risky. With the situation, and how comfortably they're sitting, they're not going to be risky. And in general, a company does have a lifespan, and the lifespan is very well understood.

[Amazing Iceman]

Wow! Stock has terribly collapsed after Steve's passing.
What did SJ had that kept stock going up?

[JayCee842]

Pffft what does that old man and insider trader buffett know

[Avatar74]

Originally Posted by TallManNY

Okay. So haven't there been well respected academic reports that show that technical trading doesn't work. In addition, you know, to the fact that it just sounds crazy (flying wedges and death crosses and the sort). Can there really be enough folks using this voodoo and those folks have enough money that they can actual move a company the size of Apple?

"I knew technical analysis didn't work when I flipped the charts upside down and got the same answer." - Warren Buffett

Technical analysis is problematic because it is basically using the chart to predict the chart, and hoping that the next person who does so is only slightly less intelligent/informed than you.

AAPL is underpriced right now but only by a very slim margin. That's assuming DCF projections forward from Dec 12 are still reasonable; if expectations of future operating cash shifted down, then AAPL is likely not underpriced.

But, if Apple initiates a buyback, it'll be because they know something about their pipeline that we don't. However, that should not be a signal that prior acceleration on the stock price will be seen again. There are safer bets to take with wider margins of safety.

If Apple instead initiates a dividend payout, then that would demonstrate that they've done the math and don't feel that the company is underpriced... why pay you $1 for eighty cents when I can trim down what I'm socking away in retained earnings by 2% (because I'm already sitting on $100 billion in short term investments, cash and equivalents)...

[ArcaneDevice]

Originally Posted by Amazing Iceman

Wow! Stock has terribly collapsed after Steve's passing.
What did SJ had that kept stock going up?

Charisma, passion, public awareness, force of will and a singular vision for the future that people could get behind even if it was at the expense of other business relationships.

Without that Apple is a company much like any other with a boardroom full of identical and interchangeable suits.

[MTL18]

Originally Posted by Judas1

Apple stocks were ridiculously overpriced previously. This is the new norm. If I had money to spare, I would buy it at this price and hold. It a good deal and they are not going anywhere soon. But they are no longer a growth company. Nothing they come up with now will be revolutionary. Its the inevitable life cycle of a company.

Apple was never valued at a growth company. Companies like NFLX, AMZN, FB, LKDN are examples of growth stocks trading at growth stock values - even GOOG trades at a growth stock (albeit, a conservative one).

AAPL earns 44 dollars per share with growing revenue and earnings. I think this fact is lost whens saying that 430 is the new norm.

My initial attraction to AAPL was that it was a growth stock trading at a blue-chip valuation.

[Apple Corps]

How has Apple's stock buyback worked out so far?

[rcalderoni]

I don't get it. What if you don't want to sell your stock? Is a buyback optional? I don't get why shareholders would benefit from this.