last week, Apple (AAPL) released the latest quarterly report, the most surprised is not its performance once again far more than Wall Street expected. This heyday identified almost certainly will-than-expected – the only problem is beyond amplitude is to less. In contrast, more startling is actually on the books of the company up to $ 97.6 billion in cash and marketable securities. In recent years, we have seen many reports that of idle funds in the company’s balance sheet is accumulating, but the situation is entirely different. Of course, Apple’s shareholders all these years really is not much I can complain about the – in the past five years, the stock rose 424 percent over the same period the S & P 500 Index (S & P 500) fell by 7.4%. But please, Apple. If you can not figure out how to spend the money, or put it back to its real masters, you’re not hedge funds.
Do not forget, is not the only Apple seems do not know how to use large amounts of cash saved up in recent years. Goldman Sachs (Goldman Sachs) January 24, 2009 report shows that over the past four years, Goldman Sachs to track non-financial companies total cash on hand increased by 55%, Cash / enterprise value ratio rose from 6% to 10%. A lot of cash to stay in overseas accounts, because these companies are waiting patiently, hoping that one day the U.S. Congress will approve the tax relief on overseas income. (Good luck to them!)
good news is that Goldman Sachs believes that a “shareholders friendly” of times has arrived, because executives are not in the economic environment of highly variable hastily Investment , they finally began distributing companies sitting on piles of cash. In 2012 alone, these companies tracked by Goldman Sachs appears to have prepared to up to 37% of the cash used for dividends and stock buybacks, about 5 percentage points higher than the 2002-2010 average.
All this means that if you know how to stock selection, have the opportunity to earn a fortune.
stock repurchase. In 2011, US-listed company’s board of directors approved a total of about U.S. $ 530 billion stock repurchase, a 45% higher than in 2011, six times the 2009 low. Although Goldman acknowledges, not always repurchase stocks outperformed the broader market a reliable indicator, since March 2009, the new repurchase program before and after the stock buyback announcement, the stock prices is indeed stronger than the S & P index. Moreover, we are talking about these plans is not a small number: in 2011, Walt Disney (Walt Disney) announced a $ 16 billion share repurchase program, JP Morgan Chase (JPMorgan Chase) is a $ 15 billion, Wal-Mart (Wal -Mart,) is also a $ 15 billion. Goldman Sachs also lists several may soon be declared or to expand the company of the repurchase program, including eBay, Pfizer (Pfizer) and Qualcomm (Qualcomm), and most of the buyback program is not yet completed the company, such as dimensional the Ya Kangmu (Viacom), Saks, department stores, Abercrombie & Fitch clothing company and IAC / InterActive Corp. media company.The
The following is a list of companies I like. Since the buyback program seems expected to support the company’s share price, investors might consider the sale of these companies put option can be secured. If the future stock price will not drop, the option price will fall, wait until the option expires, you can get very little money, can not do anything. Said not foolproof, but if the company is not particularly bad bad, if the market does not crash, which is almost like a dream come true. Several candidate companies: cable television company Cablevision, Halliburton (Halliburton,) and the American Eagle clothing company (American Eagle Outfitters).
of course, a disaster may occur, did occur. As we all know, network video rental company Netflix when the company’s share price remains high, investment and $ 10 billion for stock repurchase, the company last fall into a quandary, cash almost exhausted Netflix had implemented a $ 70 per share dilutive financing. Even if the situation is not so bad, can not ensure that a severe shock when in the market stock repurchases can still support the stock price. Goldman Sachs pointed out that the stock repurchase of long-term effects at best, only mixed.
dividends. Goldman Sachs research pointed out that the dividend will be similar to the substantial growth, but Goldman Sachs analysts are indeed expected to be returned to shareholders in cash level will grow steadily – in 2011 about 14% of the capital for dividend – 2002 – The mean flat in 2010, more than 12 percent of the 2006-2008 level. When the company is still compared to return cash to shareholders, they can put to better use. The question is: Now fixed income investment income is still pitifully low – 10-year U.S. Treasury bonds is 2.04% a year is a paltry 0.11%. For themselves to find a high-dividend stocks can be very favorable position. Goldman lists the dividend yield is attractive and the dividend history higher growth companies, including Pfizer (reappears), GE (General Electric) Coca-Cola (Coca-Cola) and Boeing (of Boeing). Possible risk of a higher stock of some dividend yield is slightly higher, including Och-Ziff Capital Management, asset management companies (dividend yield of 10.7%!), All the power of communications companies (Verizon, 5.2%) and Duke Energy (Duke Energy) (4.7%).
mergers and acquisitions. The cash acquisition of the pace seems also accelerating. Market research firm Capital IQ, the data show that in the past 12 months there have been many large U.S. companies have opened the purse, large blocks of mergers and acquisitions, including the MGM Group (MGM Resorts, cash payments of $ 407 million), Liberty Interactive media companies (1.85 billion U.S. dollars), Allscripts Healthcare, Health Care, Inc. ($ 121,500,000) and Ford (Ford Motor Company) ($ 9,400 Million). Not every CEO are willing to bear such risks, in other words, there are still a lot of money is not spent.
So, entities invest in? Today, this fashionable political rhetoric, “creating jobs”. Company executives recently accepted the interview of the “Fortune” magazine (Fortune), less than half of 2012 is expected to expand the staff recruitment. 2011 companies, 38% of the cash used for capital expenditures, still below the long-term average of 39% or even less than 42% in 2009. McKinsey & Company (McKinsey & Company) in September 2011 a research study, although many executives feel that the company is business investment, businesses are more and more to avoid the possible loss – in their the eyes of potential losses than potential gains more weight. In other words, they are not the guts to make bold decisions. Therefore, they may begin to return cash to shareholders.
Therefore, the message is positive, although the positive may be limited. It seems a long cash storage period is finally expected to end. If the company can not think of how investments or acquisitions, they will return money to shareholders. Now, you need people to let Apple know on this issue (although this is rare), they were not much better than other companies and other companies are no different. The money is not their shareholders. If the money that they had not, in respect of back to the shareholders.