One question facing investors is what Apple is going to do with that massive 137 billion-pound cash pile. It could buy several small countries, although I haven’t seen any mention of that in its strategic plan. A better idea would be to share it with investors, through special dividends or share buybacks. Plenty of people have their eyes on that money, including David Einhorn at hedge fund Greenlight Capital, who wants Apple to reward investors with a juicy dividend. Who wouldn’t want a share of that?
I might regret this, but…
And yet, and yet… I just can’t bring myself to spend $475 on a single Apple stock. When I compare its fantastic double-digit earnings-per-share growth of the last five or six years to the projected 1% in the year to September 2013, and better-but-still-modest 14% the following year, I lose my appetite. That 0.6% yield leaves a sour taste. Its valuation is hardly demanding, at 10.6 times earnings, but given the extreme reactions that Apple generates, the slightest dip in fortunes could trigger another bout of mass panic. Technology companies rise and fall — just ask International Business Machines Corp. (NYSE:IBM), Nokia Corporation (ADR) (NYSE:NOK), Sage, Microsoft Corporation (NASDAQ:MSFT)… Apple’s share price could still hit new highs but, if it doesn’t, it has a long way to fall.
The article Should I Buy Apple? originally appeared on Fool.com and is written by Harvey Jones.
Harvey doesn’t own any shares mentioned in this article. The Motley Fool owns shares in Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple.
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