Apple (AAPL) announced Q4 results. The buzz over iPad, iPhone and product margins overwhelms a fundamental issue. Capital efficiency. Apple has some $50 billion on the balance sheet. That is roughly equal to 20% of its current north of $300 @ share market cap. When compared to either Citigroup (C),Wells Fargo (WFC) or Bank of America (BAC) their cash stash is approximately 40% of the relative market caps.
If banks get political heat for not lending why does Apple not get the same political heat for not investing. Perhaps politicians still have not figured it out yet.
Apple is reporting half the cash balance as long-term securities. No reporting on what the investment strategy is. For $50 billion in cash we need Steve Jobs to explain the cash strategy and not make guest appearances on his own conference call just to bash one specific competitor: Research in Motion (RIMM). By the way Apple cash balance is equal to twice the market cap for RIM. So what are you afraid of?
Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.
- Apple Has $51 Billion and a Shopping List. Is Facebook On It? (mediamemo.allthingsd.com)
- What Do Steve Jobs And Warren Buffett Have In Common? (blogs.forbes.com)
- Apple’s cash quintupled in last four years and doubled in last two years. (asymco.com)
- Apple Reports Profit of $4.3 Billion on Record Sales (dailyfinance.com)
- Why Steve Jobs doesn’t pay dividends (tech.fortune.cnn.com)
- Apple’s Jobs Keeping Cash ‘Powder Dry’ for Future Bets (businessweek.com)
- Apple Reports Fourth Quarter Results (eon.businesswire.com)
- Analyst to Apple – Shareholders want some of that $46 billion you got stashed!!! (zdnet.com)