Apple's buybacks exploited stock dips to generate billions in shareholder value

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Comments

  • Reply 21 of 99

    1422 Shares

    47 - deep in the money July Options equiv to 4700 Shares

    6,122 total shares - not selling a single share or option - you have not seen any movement whatsoever as far as I am concerned.  Over the top undervalued

     

    Tim Cook is GREAT CEO

    Great buying shares back hand over fist with BILLIONS at a discount.

     

    All those who sold based on absurd hype from NY Times and the like about the sky is falling deserve what they got (loss of the greatest investment of their time - before it goes back to true value in the 700s to 800s by July timetable).  You need to read fact, not hype or you deserve what you get (politically or loss of your great investment).

     

    Reading fact of what Apple is working on, growth, new markets, new products on and on - this truly is a no-brainer.  Only thing that is needed is "time" to flush out the stupid hands that can hurt Apple investors waiting to flush out the weak/investors who gamble and don't read or THINK.

     

    The most painful thing in process now is that steady painful day after day $3-$7 gains daily and investors kicking themselves that they are not into the stock when they start thinking about what is going into the forward numbers .. china mobile, japan expansion, now russia back in (need iPhones for the next revolution), iwatch in a few months, gaming …….. on and on.   This is going to be a PAINFUL 3 months to those who are not in ………..

  • Reply 22 of 99
    Quote:

    Originally Posted by mstone View Post

     

    Thanks, all good info, especially for someone like me who is not very involved in stocks and finances. Right now everything I have is in real estate, mutual funds, insurance, 401s and annuities. I used to own AAPL and sold at a considerable profit several years ago.

     

    One question: What relationship does the stock price/market cap have to the actual assets of a company? For example if Apple "theoretically" liquidated all their assets, do you think it would exceed their market cap or is some of the share price reflecting forward looking earnings? Or in Apple's case, is the share price/market cap under valued compared to their actual assets?

     

    Not that I expect them to shut it down and give the money back to the shareholders as in the Michael Dell remarks.


     

    Value of the company is the future income stream into infinity discounted to present value plus assets on hand…. it is not liquidation value unless you are looking at a company like dell .. that is slowly crawling or ceasing to exist …….!  No one can afford to buy Apple ….out ………….  

     

    Fortunately with Cook and Carl acting together on this buy-back concept - we THINKERS are going to make a fortune looking at the end game - I am a lot better off with millions of weak/gamblers - who don't THINK selling shares …when they should be BUYING BUYING ET AL… which I would with my new retirement plan contribution if I was not already over the top way over allocated by any rational advisor analysis ………… 

  • Reply 23 of 99
    hill60hill60 Posts: 6,992member
    aaronj wrote: »
    Heck, it's not even the day-trading losers you have to worry about anymore.  So much of the trading is just automated, going second to second.

    Though I do agree with you.

    Second to second?

    Try micro trades in nanoseconds, traders are getting as close to Wall Street as they can so their algorithms can work as fast as possible, the speed of light over a length of fibre has an effect.
  • Reply 24 of 99
    crowleycrowley Posts: 9,361member
    mstone wrote: »
    One question: What relationship does the stock price/market cap have to the actual assets of a company? For example if Apple "theoretically" liquidated all their assets, do you think it would exceed their market cap or is some of the share price reflecting forward looking earnings? Or in Apple's case, is the share price/market cap under valued compared to their actual assets?
    In a perfect world the market cap is all of the company's assets, minus depreciation, plus cash and minus debt, and the total of all their expected earnings for the lifetime of the company. It's very literally meant to be what the company is worth. Obviously the last bit is a tall order to guess for almost any company, which is where the much-maligned analysts come into play.

    If Apple were to liquidate everything then they'd fall way short of their market cap; so much of their value is tied up in their brand and forward potential, even though their price to earnings ratio is relatively low.
  • Reply 25 of 99
    chabigchabig Posts: 640member
    Quote:

    Originally Posted by sflocal View Post

     

    Those people just try milking a company dry, then move on to the next victim with zero regard to these companies actually trying to make a long-term difference.


     

    The buying and selling of stock on the market doesn't affect the company at all, as the company isn't a party to the day to day trading of stock.

  • Reply 26 of 99
    512ke512ke Posts: 782member

    I agree that APPL is subjected to irrationally wide swings.

     

    However, I do see the concern of investors when Android continues to gain market share in very important ways.

     

    Yes, Apple is still selling record numbers of products, with a great ecosystem.  But the company like any company needs new growth.

     

    And it's coming!

     

    I think the recent run-up in share price is due not only to Apple's buying back its stock, but also to the rumors/promise surrounding bigger screen iPhones and a possible iWatch with health monitoring capabilities.

  • Reply 27 of 99
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by hill60 View Post

     
     

    Try micro trades in nanoseconds, traders are getting as close to Wall Street as they can so their algorithms can work as fast as possible, the speed of light over a length of fibre has an effect.

    Mahwah, N.J.

     

    I read that some Chicago trading companies are actually using lasers to communicate to NJ in order to get around the latency issue with that distance using the Internet.

  • Reply 28 of 99
    Originally Posted by mstone View Post

    I read that some Chicago trading companies are actually using lasers to communicate to NJ in order to get around the latency issue with that distance using the Internet.


     

    Laser Trading

    Directed by Michael Bay

    Written by the CSI team

    Coming This Summer

     

  • Reply 29 of 99
    As Apple continues to buy in shares and if the price continues to stagnate, the cost to take the company private declines. At some point, the company will be worth more to management and principal investors private than public. When that threshold is crossed you may get a leveraged buyout proposal for the remaining shares outstanding at what amounts to a bargain to management and whoever else is providing seed capital. Apple has a very strong balance sheet. Apple is cash and cash flow rich. It's earnings are underpriced and underappreciated in the market. Either the stock will go up dramatically over time or something like the above will eventually occur.
  • Reply 29 of 99
    As Apple continues to buy in shares and if the price continues to stagnate, the cost to take the company private declines. At some point, the company will be worth more to management and principal investors private than public. When that threshold is crossed you may get a leveraged buyout proposal for the remaining shares outstanding at what amounts to a bargain to management and whoever else is providing seed capital. Apple has a very strong balance sheet. Apple is cash and cash flow rich. It's earnings are underpriced and underappreciated in the market. Either the stock will go up dramatically over time or something like the above will eventually occur.
  • Reply 31 of 99
    Quote:

    Originally Posted by starxd View Post

     

    I agree this article is silly, but there is absolutely nothing "apologetic" about it.  How you could call him an Apple "apologist" is beyond me.  

     


     

    While I certainly do not defend the ideas of the poster that you are responding to, there are two definitions of "apologetic", and it seems like you are only aware of one of them.

  • Reply 32 of 99
    rgh71rgh71 Posts: 120member
    sacto joe wrote: »
    Thus marks the end of the market's stupid phase vis-a-vis AAPL. Value it at what it's worth, or find Apple taking it ever closer to going private. And all those tens of billions in cash generated PER YEAR will go into someone else's pocket.
    Apple can't afford to take itself private
  • Reply 33 of 99
    rgh71rgh71 Posts: 120member
    sflocal wrote: »

    I understand.  I'm kind of grouping all these wall street gamblers into the same bucket.  Whether mechanized, or some guy day-trading all the time that tries to fortune-tell, they are all responsible for manipulating the market.  


    Those people just try milking a company dry, then move on to the next victim with zero regard to these companies actually trying to make a long-term difference.
    It is very hard to manipulate a stock price of a company of this size with this much volume. Apple's $14bn barely move it up. Everyone think about that. You guys have no concept of the market.
  • Reply 34 of 99
    mvigodmvigod Posts: 172member
    Looks like they should have listened to carl icahn and bought back 150B worth. If their tiny buyback was profitable they could have gained over 15B very quickly and retired an enormous amount of the float (almost 1/3 of it). Savings over the years from not paying out a dividend to 1/3 of the shares was an extra bonus. This as Icahn said was a no brainer. Apple just didn't have the confidence to go big. They may be missing a rare opportunity and already seem to possibly have missed the best chance they had. It may only get more expensive from here.
  • Reply 35 of 99
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by hill60 View Post





    Second to second?



    Try micro trades in nanoseconds, traders are getting as close to Wall Street as they can so their algorithms can work as fast as possible, the speed of light over a length of fibre has an effect.

     

    True.  Thanks for the correction. 

  • Reply 36 of 99
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by mvigod View Post



    Looks like they should have listened to carl icahn and bought back 150B worth. If their tiny buyback was profitable they could have gained over 15B very quickly and retired an enormous amount of the float (almost 1/3 of it). Savings over the years from not paying out a dividend to 1/3 of the shares was an extra bonus. This as Icahn said was a no brainer. Apple just didn't have the confidence to go big. They may be missing a rare opportunity and already seem to possibly have missed the best chance they had. It may only get more expensive from here.

     

    Did you even read the article?  They don't HAVE $150B on hand, domestically, to do something like that (even if it were a good idea, which it isn't).  And any gains would be negated by repatriating the cash from abroad and having it taxed (taxed AGAIN, actually).

  • Reply 37 of 99
    rgh71rgh71 Posts: 120member
    mvigod wrote: »
    Looks like they should have listened to carl icahn and bought back 150B worth. If their tiny buyback was profitable they could have gained over 15B very quickly and retired an enormous amount of the float (almost 1/3 of it). Savings over the years from not paying out a dividend to 1/3 of the shares was an extra bonus. This as Icahn said was a no brainer. Apple just didn't have the confidence to go big. They may be missing a rare opportunity and already seem to possibly have missed the best chance they had. It may only get more expensive from here.
    And use ALL of their cash? Are u insane? U think there won't be other dips? If not that'll be great news, not bad, indicative of great things happening.
  • Reply 38 of 99
    mvigodmvigod Posts: 172member
    Quote:

    Originally Posted by AaronJ View Post

     

     

    Did you even read the article?  They don't HAVE $150B on hand, domestically, to do something like that (even if it were a good idea, which it isn't).  And any gains would be negated by repatriating the cash from abroad and having it taxed (taxed AGAIN, actually).


     

     

    Yes I read it all.  The proposal from Icahn was NOT to use overseas cash.  It was to borrow at historically low interest rates which for apple would be sub 3%.  After they expense the interest it would be closer to 2% net interest or as close to free as they can ever get.  Why a no brainer?  Apple is earning 40/share on a market cap of 500B.  Take out the cash and it's under 400B.  This makes the earnings yield on the buyback over 8% net to apple.  Basically a number that if they flatline EPS for 9 years is a 100% return on the investment JUST FROM THE BUYBACK.  They would be paying back the loan out of cash flow and exceeding the interest rate by that 8%.

     

    This simple no brainer finance seems to be incomprehensible to the Apple management team and board.  Icahn is the only smart guy in the room.  It absolutely amazes me. This is not calculus folks.  Just simple grade school math.

  • Reply 39 of 99
    stefstef Posts: 87member
    So Apple, to jujitsu Wall Street.
  • Reply 40 of 99
    Buying back shares increases the earnings per share which will increase the value of the shares. Plus it saves Apple paying the dividend on those shares.
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