Apple Buried the Lead

 | Mar 19, 2012 | 12:00 PM EDT  | Comments
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Candidly, I was disappointed in Apple (AAPL) today.

Not because they are paying out a relatively paltry dividend given their cash hoard. After all, if this stock were to come down then you know the dividend would seem rather bountiful. No one should ever sniff at $2.65 a quarter when not that long ago the stock was in the $200s. There's plenty of room to raise the dividend over time as Intel (INTC) and Microsoft (MSFT) have done. I am also sure that the dividend will get other funds that can only own dividend stocks to purchase Apple, but that's not a real driver to own the stock. 

And I am not disappointed because of the $10 billion buyback. I don't care for buybacks in general as we know, and this one does nothing more than shrink what's being issued to executives. I never care for that kind of activity, but I will give Apple this. If any company has execs that should be rewarded it is this one.

No, what bothered me was that this was a very special weekend for Apple, the weekend the iPad hit the stores, and for those of us who waited in line to get one we understood that something so special was going on that the dividend stole the thunder from the actual story, a new device that I think is taking America by storm.

I made sure before I went to my Apple story that the line wasn't too long. Of course, Apple was incredibly organized and its crowd control was superb. But the fact was it needed it. Apple had made sure, at least with my store, that it had ample iPads in stock. But I still had to settle for a black 32MB when I wanted a white one. Beggars can't be choosers.

I think that the sheer volume of iPads would have made for a more inspirational Apple story. A press conference just about the earth shattering introduction, something that Apple can do because its inventory controls are superlative, might have actually caused the stock to go up more than it did on the dividend.

Plus, I wish that Apple had waited for a down moment for the stock to put in a little shock and awe. I sensed almost an Apple fatigue by the end of the morning as evidenced by the fact that the stock had traded at $605 then had gone down and never recovered that higher ground.

Altogether I am thrilled that Apple's giving money back. It can't earn much on the capital now and the biggest boost to earnings that I can think of would be an increase in short rates by the Fed.

Might as well give it to people who own it.

In the end, Apple buried the lead. After the sales this weekend I think estimates are way too low. I feel more certain that they can do my $50 in fiscal year 2012 than ever before. And 12x earnings with a decent dividend? Find me another growth story with this characteristics and I will tell you that you have a best-in-show stock to own, to invest in and to celebrate for 2012.

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