One analyst believes that it’s time for Apple provide even more of its cash reserves to investors, thereby reversing their recent losses and boosting their share price.
Brian White of Topeka Capital Markets said on Thursday he believes it’s “time for Apple to seize the opportunity” and initiate a much more significant return of cash to investors. He agrees with hedge fund manager David Einhorn of Greenlight Capital, who is suing Apple in an attempt to have the company distribute preferred stock to shareholders.
White says he doesn’t believe Einhorn is “married to the idea” of perpetual preferred stock, but just sees it as a way to get more of Apple’s cash hoard shared with stockholders.
At the end of the holiday quarter, Apple held $137.1 billion in net cash. Of that amount, over $94 billion was held overseas. With the company’s cash pile continuing to expand, he believes “change is in the air,” and that Apple will eventually pay out more cash to shareholders.
“Since over $94 billion of the net cash is outside of the U.S., we believe David Einhorn’s perpetual stock makes sense,” White said. “Also, Apple could tap into the debt market to increase its U.S. cash position, using the proceeds for an increased common stock dividend and an expanded stock repurchase program.”
Topeka Capital Markets has maintained its price target of $888 for Apple stock — a number nearly double its current trading price.
