Apple Share Buyback: At this point, everybody is well aware that Apple Inc. (NASDAQ:AAPL) is sitting on a pile of cash. This has been discussed time and time again, and has even led to a recent lawsuit. With all this in mind, investors are beginning to wonder what 2013 will bring. How much cash does the Cupertino-based company really need?
Apple Inc. (NASDAQ:AAPL) is actually the smart money’s second favorite publicly traded company but hedge funds have started dumping Apple Inc. (NASDAQ:AAPL) in favor of a surprising financial stock (see which stock hedge funds are buying like crazy).
MarketWatch is reporting, based on a report by Moody’s Investors Services, that the company’s “cash hoard could hit $170 billion by year’s end if the iPhone maker doesn’t change its philosophy towards dividends and stock buybacks.”
As you know, David Einhorn, along with other large investors, are asking Apple Inc. (NASDAQ:AAPL) to return some of the cash to shareholders. While this is something the company has been considering, there has not been any major news as of late.
Moody’s researchers are quoted in the MarketWatch article as saying the following:
“Unless Apple changes its philosophy towards liquidity/shareholder returns by increasing its $10 billion annual common dividend, or if Apple increases it stock buyback program, we estimate Apple’s cash balances could increase by another $35 billion in 2013 and exceed $170 billion.”
If that happens, it will be interesting to see what investors begin to say and do. Thing are already heating up, and another $35 billion in cash is sure to change the landscape even further.
While Apple Inc. (NASDAQ:AAPL) is sitting on a lot of cash, there are other companies doing the same. Not to the same degree, of course. For example, Microsoft has $68.3 billion in cash followed by Google at $48.1 billion.
Something has to change in 2013. At this point, however, what happens next is anybody’s guess.
What do you think Apple Inc. (NASDAQ:AAPL) should do with all this cash? Share your thoughts in the comment section below.
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DISCLOSURE: I have no positions in any stock mentioned.
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