Apple’s Buybacks Set New Record for Returns

Posted by at 12:47 pm on August 5, 2014

Apple’s most recent stock buybacks set a record for “the highest four-month returns among the 20 biggest quarterly repurchases by any company since 1998,” says Bloomberg, using data gathered in collaboration with Standard & Poor’s. The publication notes that Apple’s stock value has increased 77 percent during the last 15 months, and 25 percent since last year’s $18 billion buyback. It adds that “the ratio of Apple’s per-share profit growth to its overall earnings has increased due to buybacks;” in the last quarter, per-share profit grew 19.6 percent year-over-year, versus a net income growth of 12.3 percent.

The buybacks have been a response to investor pressure for Apple to do more with its billions in cash reserves, particularly from wealthy “activist” investor Carl Icahn. Bloomberg observes however that during the past year, S&P 500 corporations in general have spent roughly $211 billion on buybacks. They may be worried that the current five-year bull market is too at risk of selloffs, such as the one that happened last week.

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