Credit Suisse Analyst Kulbinder Garcha thinks that Apple Inc. (NASDAQ:AAPL) might increase its cash return program to a staggering $200 billion, which is currently at $130 billion. Garcha has also upgraded Apple Inc. (NASDAQ:AAPL) stock from a ‘Neutral’ rating to ‘Outperform’ and increased the price target to $130. Apple Inc. (NASDAQ:AAPL) is currently trading around $110. Elevation Partners Co-Founder and Reverb Executive Chairman, Roger McNamee talked on CNBC about this prediction about Apple Inc. (NASDAQ:AAPL) increasing cash return program value and his take on the stock.
McNamee said that the numbers that the reports say is mindboggling, but he added that Apple Inc. (NASDAQ:AAPL) has great ability to generate cash and he wouldn’t write the reports off, as Apple Inc. (NASDAQ:AAPL) has ability to generate that much cash and return it to shareholders and investors.
McNamee feels that he is not sure if Apple Inc. (NASDAQ:AAPL) would increase the cash return program to $200 billion, but he thinks that whatever happens Apple’s fundamental is very strong.
“When you look at Apple’s ability to generate cash, I wouldn’t put it past them. I have no idea what they are going to do. The one thing I do know, […] Whatever the emotions, the underlying fundamentals at Apple are really fantastic and they are in this position, where the ecosystem around the iOS operating system and the Macintosh operating system are one large cohesive whole and with each new feature, whether it’s the Apple pay or the Watch or whatever, each thing makes the overall ecosystem more valuable and interestingly enough, because it’s one big ecosystem. They aren’t sensitive to success of individual products,” McNamee said.
He feels that Apple Inc. (NASDAQ:AAPL) is an amazingly cheap stock with a really a 2% yield. He thinks that 2% yield is a big number in a market where yields are really hard to come. So he insisted that if an investor wanted to own a stock in the tech space, he would suggest Apple Inc. (NASDAQ:AAPL) stock. But he said that the individuals market call is going to decide whether they want to be in Apple Inc. (NASDAQ:AAPL) stock or not.
Apple Inc. (NASDAQ:AAPL) cannot keep increasing the cash returns as sooner rather than later it might become victim of its own success. McNamee said that people would like every company to become victim of their own success like Apple Inc. (NASDAQ:AAPL). He thinks that their brand at the moment is unassailable and he feels that Apple Inc. (NASDAQ:AAPL) is outrunning all of its competitors very effectively at the moment.
“Apple is way way way better than average stock to hold,” McNamee said.
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