Tim Cook: Apple's Shares 'Undervalued', Expansion of Share Buyback Program 'Shows Confidence'

[MacRumors]

In an interview with The Wall Street Journal following the release of Apple's financial results for the most recent quarter, CEO Tim Cook stated that the company's stock was "undervalued" and that the expansion of the share buyback program "shows how much confidence [Apple] has in the future of the company."

Apple announced an increase of its capital return program to $130 billion, from an announced $100 billion last year, with the company expecting to complete the program by the end of 2015. Apple will take on additional debt both domestically and internationally to finance the program.

The company will also institute a 7-for-1 stock split in June, with shareholders of record on June 2 receiving an additional six shares of stock for each share they own on June 9, and a dramatic reduction in the price of each share to match. Apple CEO Tim Cook said that the company was undertaking the split to make it easier for all potential shareholders to afford to invest in the company.

Apple's board approved an 8% increase in the company's quarterly cash dividend, up to $3.29 from $3.05, and Cook said the company anticipates annual increases in the dividend going forward.

Article Link: Tim Cook: Apple's Shares 'Undervalued', Expansion of Share Buyback Program 'Shows Confidence'

 

[Karma*Police]

I would say severely undervalued.

 

[applesith]

Very undervalued. They are the best consumer electronics company.

 

[John.B]

Exactly what Icahn wanted, no?

 

[Mackan]

Very overvalued. Sell.

 

[hydr]

What is the outstanding share # now?

 

[snprintf]

Very undervalued. They are the best consumer electronics company.

They're also the most valuable company in the world still.

----------

No! He caved! The stock buyback is a bad idea, I think. The drop in price has resulted purely from Apple's recent failures, probably blamable on Tim Cook (but we don't really know). Quality control has really been lackluster all of a sudden. It would be a waste of money to try making up for that by buying back shares.

If you ask me, something stable and dividend-rich like those S&P500 ETFs are the way to go at this point. As a longtime fan of Apple, I'm beginning to lose hope in them now. Maybe Apple can't do it without Jobs.

 

[rockarollr]

Lots of Confidence

First, I'd like to say that I personally enjoyed listening to the Q2 earnings call today. It's always interesting to get a little insight into such an amazing company while being 'around the virtual meeting table'.

As far as stock value goes, I'd say it's definitely undervalued right now and Tim Cook knows it for certain. You can bet Tim and the guys at Apple know something that we don't; that Steve left a product map with tons of great ideas that are a) in the final stages of development, b) will be under development soon or c) will gain 'in development' status once technology catches up to the ideas outlined in the product maps. Steve left Jony Ive in charge of the product design part of the company and knew it would be in the best hands he could possibly leave it in. He often said that he and Jony thought very much alike. He also left Tim Cook to oversee the whole operation knowing he could count on Tim to, unlike Gil Amelio, keep 'the ship pointed in the right direction'. Tim proved worthy while Jobs was on medical leave several times and Steve had a lot of faith in his abilities. In fact, it could be argued that Steve's greatest legacy is not necessarily the products he created while he was with us but actually Apple, the company itself, and the collection of people that now see to its day-to-day operations. What he left behind was a group of amazing people, some wonderful product ideas, and a war chest of cash for them all to finish bringing these ideas to fruition and to fight off the copycats that would surely try to pilfer product ideas in the future. Tim is a patient, yet determined and steadfast leader... and Steve knew that's what Apple needed at the top once he was gone.

Also remember, Steve was a forward thinker. He only kept those around him that were also forward thinkers. I bet, together, he and the others discussed and mapped some wonderful product ideas that have yet to even be remotely realized. Yet. It'll take years of technology advancement and development for some of these ideas to be realized. It will take time. But, as always with Apple, the products will speak for themselves. They always do.

Brace yourselves. I think 2014 is going to be one of those ground-breaking product years!

 

[Urban Joe]

iWTF

Undervalued? Seriously?
Do they know something they are not telling us....
Are they now working in cahoots with the Aliens in Area 51 ?
Will the iWatch version of Uber let us hail a UFO for intercontinental travel?
I'm seriously LMAO.

They were seriously undervalued like 7 years ago, but now?
I like Apple but I'm skeptical of these assessments.

 

[smelly cat]

13 times p/e ratio for a company like apple? With those financials and brand loyalty? Undervalued IMHO.

 

[G4DP]

So they are reducing market availability to falsely inflate the market value.

Who created millions of shares in stupid pay deals for board members? The company is worth exactly what the market prices states. If other people though it was worth more then they would be buying stock. So they are buying back and having a share split at the same time? Really, who thinks these things up, then to claim that the stock is undervalued is just stupid.

The only thing all of this achieves is giving Apple a larger share of owning itself.
Which wouldn't be a problem if they had used braincells in the first place when putting together pay deals.

How does it show that Apple is confident in Apple? You would have to be a pretty ***t CEO to not have confidence in a company with $billion located around the world.

First, I'd like to say that I personally enjoyed listening to the Q2 earnings call today. It's always interesting to get a little insight into such an amazing company while being 'around the virtual meeting table'.

As far as stock value goes, I'd say it's definitely undervalued right now and Tim Cook knows it for certain. You can bet Tim and the guys at Apple know something that we don't; that Steve left a product map with tons of great ideas that are a) in the final stages of development, b) will be under development soon or c) will gain 'in development' status once technology catches up to the ideas outlined in the product maps. Steve left Jony Ive in charge of the product design part of the company and knew it would be in the best hands he could possibly leave it in. He often said that he and Jony thought very much alike. He also left Tim Cook to oversee the whole operation knowing he could count on Tim to, unlike Gil Amelio, keep 'the ship pointed in the right direction'. Tim proved worthy while Jobs was on medical leave several times and Steve had a lot of faith in his abilities. In fact, it could be argued that Steve's greatest legacy is not necessarily the products he created while he was with us but actually Apple, the company itself, and the collection of people that now see to its day-to-day operations. What he left behind was a group of amazing people, some wonderful product ideas, and a war chest of cash for them all to finish bringing these ideas to fruition and to fight off the copycats that would surely try to pilfer product ideas in the future. Tim is a patient, yet determined and steadfast leader... and Steve knew that's what Apple needed at the top once he was gone.

Also remember, Steve was a forward thinker. He only kept those around him that were also forward thinkers. I bet, together, he and the others discussed and mapped some wonderful product ideas that have yet to even be remotely realized. Yet. It'll take years of technology advancement and development for some of these ideas to be realized. It will take time. But, as always with Apple, the products will speak for themselves. They always do.

Brace yourselves. I think 2014 is going to be one of those ground-breaking product years!

Nice post Tim. Shame it's all horse hockey.

 

[jonnysods]

Am I reading this right?

I own one share - will I get 6 more in June?

 

[inscrewtable]

I know there probably is a logical and fiscally sound reason for Apple taking on debt to finance a buyback when they are cashed up to the tune of 160 billion $, nevertheless if this is how the world works then in this instance I cherish my ignorance.

 

[gnasher729]

Am I reading this right?

I own one share - will I get 6 more in June?

Yes. Each share will be worth one seventh of what your one share is worth now. Apple share price will be somewhere around $75.

 

[applesith]

They're also the most valuable company in the world still.

----------

No! He caved! The stock buyback is a bad idea, I think. The drop in price has resulted purely from Apple's recent failures, probably blamable on Tim Cook (but we don't really know). Quality control has really been lackluster all of a sudden. It would be a waste of money to try making up for that by buying back shares.

If you ask me, something stable and dividend-rich like those S&P500 ETFs are the way to go at this point. As a longtime fan of Apple, I'm beginning to lose hope in them now. Maybe Apple can't do it without Jobs.

Delusion. The stock rose after hours and opened +8% this morning. If you are losing hope, then sell your stock and buy someone else's devices. No loss here.

 

[unplugme71]

Never understood stock splits. Just buy a fraction of a share if you can't afford a full one.

It's the market value that's more important than # of shares anyway.

I own 24.3778 shares of Apple right now.

 

[sofila]

Tim Cook knows it for certain. You can bet Tim and the guys at Apple know something that we don't;

Who would have thought it? Apple CEO knows something about Apple better than us?

that Steve left a product map with tons of great ideas that are a) in the final stages of development, b) will be under development soon or c) will gain 'in development' status once technology catches up to the ideas outlined in the product maps.

I can't believe there's still people around believing in 4/5 years product map left from SJ

 

[snprintf]

Delusion. The stock rose after hours and opened +8% this morning. If you are losing hope, then sell your stock and buy someone else's devices. No loss here.

I already sold my stock a while ago, and for more than the current price (after the 8% gain). Meanwhile, I have made some money off the S&P500 with that capital. Enjoy your temporary stock price boost.

 

[IJ Reilly]

Undervalued? Seriously?
Do they know something they are not telling us....
Are they now working in cahoots with the Aliens in Area 51 ?
Will the iWatch version of Uber let us hail a UFO for intercontinental travel?
I'm seriously LMAO.

They were seriously undervalued like 7 years ago, but now?
I like Apple but I'm skeptical of these assessments.

I'm sure they know a whole lot that they don't say. I mean, we would hope they know more than we do, right? But the problem with saying that any given stock is over or under-valued is that the entire purpose of the stock markets is to value shares, so in that sense the current price is always the correct valuation. It takes into account everything that is known about the present and future. You can't beat that system unless you are better at guessing the future than the collective wisdom of the markets, and good luck with that.

----------

I know there probably is a logical and fiscally sound reason for Apple taking on debt to finance a buyback when they are cashed up to the tune of 160 billion $, nevertheless if this is how the world works then in this instance I cherish my ignorance.

Because a large portion of their cash assets are held outside of the U.S. they are essentially taking an advance against future domestic earnings. They can do this because interest rates are so low right now, and Apple debt is so appealing to corporate debt investors, that it costs them very little to do it this way.

 

[applesith]

I already sold my stock a while ago, and for more than the current price (after the 8% gain). Meanwhile, I have made some money off the S&P500 with that capital. Enjoy your temporary stock price boost.

I've made plenty off of some apple sells as well. Your comment was still delusional in terms of thinking it was a bad quarter and Tim caving.