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Are you suggesting that the smart move for Apple is a stock buy back? As opposed to investing in more R&D? Or, perhaps acquiring start ups with exciting new pr

Are you suggesting that the smart move for Apple is a stock buy back? As opposed to investing in more R&D? Or, perhaps acquiring start ups with exciting new products or technologies?

macintux 11y ago
When you have $200 billion dollars lying around, you can do multiple things simultaneously. When you have $200 billion dollars lying around and your business is dramatically undervalued, it would be practically criminal not to buy some of it back, to save on dividend payments if for no other reason.
- jonknee 11y ago
  > When you have $200 billion dollars lying around and your business is dramatically undervalued, it would be practically criminal not to buy some of it back, to save on dividend payments if for no other reason. Who's to say Apple is undervalued? It's one of the most widely held companies and they have been so for several years. Tim Cook doesn't know what's going to happen in China. Their US sales were down in Q4 2015 and they are forecasting global sales to be down in Q1 2016. They may have been spending billions buying back shares at an all time high.
  - macintux 11y ago
    It's hard to imagine a scenario where Apple has peaked. Even replacement sales would sustain a healthy business, and they have extremely high satisfaction and retention rates. People value what Apple offers. A global depression could hurt the company badly. Anything short of that should allow them to keep making money. A bad Apple quarter is still lots and lots of money.
    - jonknee 11y ago
      > It's hard to imagine a scenario where Apple has peaked. Even replacement sales would sustain a healthy business, and they have extremely high satisfaction and retention rates. It's not that hard, their largest growth market (by far) is a huge question mark. It's tough to rely on a single product that is expected to be replaced every year. There will be a ton of pressure on the iPhone 7.
      - scarface74 11y ago
        Apple's services revenue is growing every year. As long as their installed base keeps growing or even remains stable they can make money off of their existing customers. They aren't in the position of other phone manufacturers or computer manufacturers - with decreasing margins and only being able to make money at the point of sale. It was reported that the average selling price of iPhones was up by $3 and would have been up by $80 if it weren't for currency fluctuations.
  - 9935c101ab17a66 11y ago
    If you google "is apple undervalued," you'll find a litany of articles arguing that very point. One of the clearest indicators is the P to E ratio. Alphabet PE: 35, Apple: 11 (currently)
- forgetsusername 11y ago
  >your business is dramatically undervalued You must know something that millions of other sophisticated people don't.
  - macintux 11y ago
    2008, Apple was trading at $12 (split-adjusted) and nearly every careful observer of the company knew that was stupidly low based on the trajectory of the iPhone. Relying on the stock price as a valid indicator of the value of a company is a fool's errand, regardless of the "sophisticated people" trading it.
- ksec 11y ago
  Well Apple dont need to pay dividends, it never was a dividends stock until recently. The whole notion of buying back stock just to save a few dividends sounds silly to me. I really wish someone enlighten me why, why spend 183 billion on share buyback and dividends when it has nearly no use for the stock price, and no real use for the company long term etc.
  - jbverschoor 11y ago
    For employees and to take the company private again
scarface74 11y ago
Apple bought 10 companies last year mostly small companies. The age of spending money buying large companies and creating non focused conglomerates is dead. GE, for example, has been busy making itself smaller over the past couple of years. Google split itself up to become more focused and Sony just announced the creation of a separate PlayStation division.
- lostlogin 11y ago
  GE is imploding from what I can tell. Their medical imaging and drug systems are an absolute shambles. Staff are walking out and not coming back. They aren't controlling what's happening, they are in some sort of death spiral as far as I can tell. Australasian former GE customer here.

Are you suggesting that the smart move for Apple is a stock buy back? As opposed to investing in more R&D? Or, perhaps acquiring start ups with exciting new products or technologies?

macintux 11y ago

When you have $200 billion dollars lying around, you can do multiple things simultaneously. When you have $200 billion dollars lying around and your business is dramatically undervalued, it would be practically criminal not to buy some of it back, to save on dividend payments if for no other reason.

jonknee 11y ago
> When you have $200 billion dollars lying around and your business is dramatically undervalued, it would be practically criminal not to buy some of it back, to save on dividend payments if for no other reason. Who's to say Apple is undervalued? It's one of the most widely held companies and they have been so for several years. Tim Cook doesn't know what's going to happen in China. Their US sales were down in Q4 2015 and they are forecasting global sales to be down in Q1 2016. They may have been spending billions buying back shares at an all time high.
- macintux 11y ago
  It's hard to imagine a scenario where Apple has peaked. Even replacement sales would sustain a healthy business, and they have extremely high satisfaction and retention rates. People value what Apple offers. A global depression could hurt the company badly. Anything short of that should allow them to keep making money. A bad Apple quarter is still lots and lots of money.
  - jonknee 11y ago
    > It's hard to imagine a scenario where Apple has peaked. Even replacement sales would sustain a healthy business, and they have extremely high satisfaction and retention rates. It's not that hard, their largest growth market (by far) is a huge question mark. It's tough to rely on a single product that is expected to be replaced every year. There will be a ton of pressure on the iPhone 7.
    - scarface74 11y ago
      Apple's services revenue is growing every year. As long as their installed base keeps growing or even remains stable they can make money off of their existing customers. They aren't in the position of other phone manufacturers or computer manufacturers - with decreasing margins and only being able to make money at the point of sale. It was reported that the average selling price of iPhones was up by $3 and would have been up by $80 if it weren't for currency fluctuations.
- 9935c101ab17a66 11y ago
  If you google "is apple undervalued," you'll find a litany of articles arguing that very point. One of the clearest indicators is the P to E ratio. Alphabet PE: 35, Apple: 11 (currently)
forgetsusername 11y ago
>your business is dramatically undervalued You must know something that millions of other sophisticated people don't.
- macintux 11y ago
  2008, Apple was trading at $12 (split-adjusted) and nearly every careful observer of the company knew that was stupidly low based on the trajectory of the iPhone. Relying on the stock price as a valid indicator of the value of a company is a fool's errand, regardless of the "sophisticated people" trading it.
ksec 11y ago
Well Apple dont need to pay dividends, it never was a dividends stock until recently. The whole notion of buying back stock just to save a few dividends sounds silly to me. I really wish someone enlighten me why, why spend 183 billion on share buyback and dividends when it has nearly no use for the stock price, and no real use for the company long term etc.
- jbverschoor 11y ago
  For employees and to take the company private again

scarface74 11y ago

Apple bought 10 companies last year mostly small companies. The age of spending money buying large companies and creating non focused conglomerates is dead. GE, for example, has been busy making itself smaller over the past couple of years. Google split itself up to become more focused and Sony just announced the creation of a separate PlayStation division.

lostlogin 11y ago
GE is imploding from what I can tell. Their medical imaging and drug systems are an absolute shambles. Staff are walking out and not coming back. They aren't controlling what's happening, they are in some sort of death spiral as far as I can tell. Australasian former GE customer here.