Apple is considering Einhorn's proposal, and the board and management are actively discussing disbursing more cash, the company said in a statement. Directors have been working with Goldman Sachs Group Inc. to determine the best course, according to a person with knowledge of the plans, who asked not to be named because the talks are private. While many investors agree Apple should return more money, some say Chief Executive Officer Tim Cook should focus on higher dividends, share buybacks or a special dividend.
“I would like more of the cash returned,” said Michael Scanlon, senior investment analyst at Boston-based John Hancock Asset Management, whose team oversees $3.5 billion. “I am highly confident that the current dividend on the common is going to be raised very significantly in the coming years and that there will be a meaningful increase to the buyback.” Apple said last month that it's considering an increase in share buybacks and the quarterly dividend. Apple's cash balance includes $16.2 billion of cash and $23.7 billion in short-term investments. The rest of the balance is invested in long-term marketable securities.
Eoin Treacy's view Apple is perhaps the most iconic company
in the world and its products inspire almost religious devotion among its customers.
However a number of high profile failures following Steve Jobs' death cooled
investor appetite for the share and it fell from more than $700 to the recent
low near $435.
Apple's substantial cash pile is more than ample to fund the development of new products. In a world hungry for yield, some may think the interest on its cash is probably enough to fund an additional payout. It is to be hoped that Apple follows a path similar to IBM and/or Qualcomm. IBM has a long history of share buybacks while Qualcomm has a solid record of dividend increases since instituting is payout in 2003.
Apple currently yields 2.23% and found support at the end of January near $435. It continues to rebound and will need to hold above the $450 region on the next pullback if the benefit of the doubt is to continue to be given to recovery potential.