Legg Mason’s Bill Miller: Apple Inc. (AAPL) Handles Cash Poorly

Apple Inc. (NASDAQ:AAPL) is being called out for the way it handles its cash. And not just by Greenlight Capital’s David Einhorn, either. You can put Bill Miller of Legg Mason in that camp, and he says so in an exclusive TV interview that will air on public television Friday night.

Miller sat down for an exclusive interview with Consuelo Mack on “WealthTrack,” which is picked up by public TV stations around the country. Miller discusses several topics, including his top stock plays for this year, but he did make some comments about Apple Inc. (NASDAQ:AAPL) and its massive $135 billion cash war chest. “Back a while ago when Apple had $90 billion in cash, (CEO) Tim Cook said then that it was too much cash. The company had no plans to really do anything with it, so they modestly increased its dividend and did a stock buyback. But it really didn’t do much in cutting down the cash, and now it’s up to $135 billion.

“I think Apple Inc. (NASDAQ:AAPL) can go up 50 percent with even reasonable cash allocation.” Miller said this could mean raising the dividend again, another more aggressive stock buyback, or perhaps both.  “Apple has more cash on hand than Amazon has in market capitalization,” Miller said. “Apple  is the Dr. Jekyll and Mr. Hyde of the stock market,” saying that it is still a leader in technology and innovation, but doesn’t maximize its cash to benefit its company and shareholders.

Miller has been bullish on housing and the airlines, and he discusses those markets in 2013 and why he is still on board. His Opportunity Trust mutual fund produced more than a 40-percent return last year, making it the top-performing mutual fund in 2012. The S&P 500 last year, by comparison, rose 16 percent.

The full exclusive interview will air Friday night on public television and be available online starting Monday on wealthtrack.com.

Would you be interested in hearing more about what Miller has to say about Apple Inc. (NASDAQ:AAPL)? What are your thoughts about Miller’s perspectives? We’d love your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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