You might want to double check your messages. Jim Cramer thinks you could have something from the Apple CEO.
Not literally of course, but Cramer thinks there's a message for you in a figurative way. It stems from the recently announced $14 billion buyback of Apple stock.
Now, it's not the buyback, per se, that Cramer finds very telling. It's the adjectives Tim Cook used to describe the buybacks.
"In an interview with the Wall Street Journal, Cook said the buybacks were done in a way that was aggressive and opportunistic, noted Cramer
Cramer takes the phrasing to mean that Apple is looking at its own stock strategically and buying back a substantial number of shares at a time when it's cheap.
That is, management knows how much potential lies ahead, but the Street just doesn't get it.
It means, "The company truly believes that the price action in the stock is ridiculous versus the prospects," said Cramer.
Now make no mistake, Cramer isn't saying there's a message in every buyback. Quite often, the "Mad Money" host finds buybacks to be non-events.
"When I see buybacks that are done irrespective of price, which is most of the time, I have to laugh. They can be such wastes of money," said Cramer .
However, the Apple buyback isn't on autopilot. It isn't irrespective of price. It's strategic and therefore speaks to Cramer.
This buyback was done to kill Icahn proposal before 2/27, besides they had 34B left to buy as authorized. It may also imply the board is looking to increase buybacks, hence they still have 20B left to buy. However, I don't think there is one reason alone to make them buy 14B in one week, which could mean they're almost there with great product(s) in the pipeline soon to be announced; That's why they didn't buy more last year at 385 or even in the low 400s. IMO
Cook has been implying this for 18 months…and nothing earth shattering so far. You could make the counter argument that buying that much back in such a short time was a desperate attempt to support the stock price and inflate EPS when there is no net revenue growth. If $500 was such a great price why not $380 like it was a year ago or in the low to mid 400s like it was for most of last year?
Cook is now the CEO that cried wolf. He calls everything great and exciting so it's hard to take anything he says seriously. Plus some guys probably need the share price higher so they can sell all their shares when they vest.
Good post...... Apple's forward guidance is lower than last year...... During that period the stock was in a range of 418 -465. I think Cook's purchase is a desperate attempt to keep the stock above 500. Take the heat off. Nothing has changed . Still think he is under pressure....and the board feels it too.
Fair post. But, even Jobs never unveiled new product lines every single year. Apple is due and has promised repeated new products in new categories this year. If they don't deliver, then they're stock is going to go to $250 a share. I have to think a guy like Icahn has more information and probably obtained the assurances he needed when he had dinner with Cook. No chance he puts $4.1 billion of his portfolio into AAPL unless he has news of something big. He wouldn't bother with it otherwise. He doubled down when the stock crashed a couple weeks ago. The difference now is the board AND guys like Icahn are putting their money where their mouths are. That means a lot.
not matter until apple show growth. buy back say in a way that apple finished growing so best we do is buy back. ws wants proof of growth before giving higher multiple. not so sure that iwatch will move needle.
It's an astute observation and the same thing I have been claiming about Icahn for weeks now. Who knows Apple's true guidance better than the board of Apple? $14 billion is more than the market cap of many S&P traded firms. They wouldn't spend $14 billion in two weeks if they weren't pretty sure about their margins, their products and their revenue expectations. All they need to do is expand revenues by 10% YoY and this is an $800 stock. With less shares in the float, the price action is going to drive higher even faster. Icahn knows something more specific. He would have dumped his shares if he didn't know something.