I’m a big believer in Apple. In its current products, its management team, the possibility of future products. It makes tons of profits, continues to show strong growth in revenues and profits. Best of all, I continue to think its price is very reasonable and its P/E ratio is among the more attractive ones out there. So of course, I did take a longer term position
and have done very well with it (stock is up over 25% from that point). Owning Apple isn’t as “cool” as it was a year or two ago but that is when more contrarian investors, activist investors jump in which is exactly what Carl Icahn
ended up doing. He strongly believes in Apple’s value and is very involved in trying to help Apple reach that point. The one thing that would unlock value is for Apple to put its incredible stack of cash to work. How? A big dividend is interesting and would help the case of Apple as a core dividend play but I do agree that a stock buyback is much more interesting. Decrease the number of shares outstanding to increase the value of the existing shares (in terms of the price, revenues/share and EPS). I could hold on to my shares for a couple of decades without paying any taxes.
It’s interesting how Mr. Icahn has been tweating about his progress… He’s certainly getting his point across. How many shares does one need to own to have coffee with Apple’s CEO, Tim Cook? Based on CharityBuzz, that number is staggering… like $610,000Disclaimer: Long Apple (AAPL)