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Apple Inc. Message Board

  • michalisrael157 michalisrael157 Jan 29, 2013 5:28 AM Flag

    Chart man Carter AAPL an epic buy even bear Grasso sold is beloved Goog and bought AAPL

    Friday

    Sentiment: Strong Buy

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    • Carter Worth is probably right. From "fundamental" analysis, AAPL stock is quite undervalued. The company has a total market cap. now of $423 billion. An "acquirer" or even management by a buyout with LBO funds, could use $140 billion cash equivalents on Apple's Balance Sheet to buy the stock back at today's prices, which leaves $283 billion of stock to buy. But $300 Billion of Bonds could be sold at 4% interest, which would cost $12 billion a year in interest. That's less than the pre-tax cost of Apple's present $10 billion dividend to stockholders, which given Apple's 26% tax rate costs it $13.5 billion per year. SO APPLE MANAGEMENT CAN BUY BACK ALL OF APPLE STOCK WITH CASH ON HAND AND ELIMINATE THE DIVIDEND, AND SELL BONDS. And Apple would still have $40 billion pre-tax positive cash-flow after paying off bond interest.

      GOOG and IBM have bonds outstanding. No reason for Apple alone to have no debt. Debt for Equity Swap at

 
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