“Here’s a fuller idea of Legg Mason manager Bill Miller’s view on Apple (AAPL) – the one that ever so briefly got traders buying the stock again this morning,” Brendan Conway reports for Barron’s. “This is from an excerpt of a forthcoming interview with Consuelo Mack WealthTrack that airs Friday evening at 7:30 p.m. on public television.”
Apple is the Dr. Jekyll and Mr. Hyde of the stock market. It’s the Dr. Jekyll in the sense that they are one of the greatest product innovators creating products that people love and a brand that people love, and they’re Mr. Hyde in their completely idiotic and dysfunctional capital allocation which is the worst probably in the history of corporate America among good companies. So they have $135 billion of cash… Tim Cook said when they had $90 billion of cash, he said it was way too much. They had not possible reason to use it, announced a modest dividend and a modest share buyback that would not even draw down the cash at all, not one dollar. A year later, 135 billion of cash… I think Apple at $450 a share has huge optionality. It’s nine and a half times earnings. It’s going to grow probably 15 or 16 percent this year consensus, 12 to 14 next. Coke grows six to eight percent and trades at 17 times earnings, so if Apple had a capital allocation like IBM or like McDonald’s… McDonald’s pays out 100 percent of free cash flow to shareholders and trades at 15, 16 times. Apple would be up 50 percent on just sensible capital allocation. — Legg Mason manager Bill Miller
Read more and/or watch the video in the full article here.
MacDailyNews Take: Obviously, as they’re not stupid, Apple has some master plan for all of that cash. Whether it be buying up content creators who refuse to play ball, snapping up Microsoft and putting them out of their wretched misery, building flying cars and developing iTransporters, buying Lithuania, or whatever… eventually we’ll find out what Steve told Tim to save up that mountain of cash for.
[Thanks to MacDailyNews Readers “David E.” and “Michael H.” for the heads up.]
“Technology stocks benefitted from a late-day recovery on Thursday, as word spread of a meeting planned for the U.S. House of Representatives on Sunday that could include a break in the impasse over the so-called fiscal cliff,” Dan Gallagher reports for MarketWatch.
“The turn came on reports that Congress will meet over the weekend – raising hopes that lawmakers and President Obama may hammer out a deal to avert the fiscal cliff, which refers to a mix of large tax hikes and spending cuts that could materialize if a budget deal is not settled before the new year,” Gallagher reports. “Apple was among the most notable beneficiaries of the recovery. The consumer electronics maker closed up 0.4% to $515.06. The stock had been on pace earlier to close at its lowest level since mid-February.”
Gallagher reports, “Large-cap tech stocks with large exposure to federal spending still saw notable declines for the session. Cisco Systems closed down 1.4% while Oracle shed about 1%.”
Read more in the full article here.
“Don’t look now, but Apple shares are moving back toward record levels,” Steven Russolillo reports for The Wall Street Journal.
MacDailyNews Take: Jinx!
Russolillo reports, “The stock has quickly recovered from its rare earnings miss late last month and is about $10 away from the all-time high reached earlier this year. Rumors of potential new iPhone and iPad products have helped move shares higher in recent weeks. But the latest catalyst appears to be WSJ’s report that Apple is in talks with some cable operators about making big moves in the TV market.”
“Shares are up 57% this year,” Russolillo reports. “The all-time intraday peak is $644 hit on April 10.”
Read more in the full article here.
MacDailyNews Take: Not if John Browett has anything to say about it.
“Apple’s stock, widely held by hedge funds, is now even more popular,” Chris Ciaccia reports for TheStreet.
“Investment managers including Viking Global Investors, Renaissance Technologies, Third Point and others increased their positions in the iPhone, iPad and Mac maker during the second quarter,” Ciaccia reports. “Shares of Apple fell during the period, losing 2.6% of its value, compared with a 5.1% decline in the Nasdaq.”
Ciaccia reports, “The $12 billion long-only [Viking Global Investors] fund run by Andreas Halvorsen and David C. Ott added 807,300 shares to bring their stake to just over 980,000 shares.”
Read more about some of the more notable hedge fund investors and what they did with their Apple holdings during the second quarter in the full article here.