If that's true, yes EPS will go up the more AAPL stock AAPL buys back. IBM's been doing it for years. With Apple now having a PE ex-cash of 8 or less, the yield of buying AAPL stock back is the inverse of the PE about 12%. Compare that with lousy 3% on US Treas. Bonds. Now lets assume worst-case AAPL only grows sales and earnings about 10% in 2013. That's another 10% gain assuming no change in the PE. So there's an easy 22% ROI (return on investment in one year by Apple buying back its own stock). Now assume they issue Bonds for the first time, at say 3 or 4% (Apple is far better Credit than deficits-Obama-land, so maybe Apple's bonds could pay less than US Treas.). But even at 4%, and paying bond interest is Tax Deductible (as opposed to dividends),
Apple could exchange $1100 bond paying 4% for all the shares of its Stock, and go private, and still have positive cash-flow left over.
Sentiment: Strong Buy