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Adomant
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Been trading for over 20 years. Like others that have been involved for this long, I have seen things change drastically and quickly. Any investor that says that they don't need to learn new things, they just stick to what they know, is not in touch with market reality. These markets change by... More
  • Apple's Dividend Should Support Shares In The Next Few Days 0 comments
    Feb 15, 2013 11:20 AM | about stocks: AAPL

    Haven't heard much about it, but AAPL is supposed to pay their $2.5 Billion dividend today. Given that their are more long term investors wanting to buy more at these prices, I would expect that a big portion of those proceeds are going to find their way into more shares.

    This especially true for most retirement accounts, including 401k's. I would also expect that the majority of the institutions that have been adding to their positions at these levels would also follow this pattern.

    In my opinion almost all of that $2.5 Billion will find its way into the stock, which should account for about 5 Million new shares purchased.

    Along with this I would expect some kind of announcement from the board on their plans to give more back to shareholders. This should happen any day now, before the annual shareholders meeting on the 27th of this month. There are many who are discounting this catalyst, and I think they are going to regret it.

    I'm looking for them to increase the annual dividend to return around $30-$40 Billion to shareholders. I also think they may implement a one time special dividend of around $10-15 Billion to come sooner than later. Also expecting an increase of share repurchases to around $50 Billion over the next 18-24 months.

    Maybe I'm far off, but I do not think that it is worth the risk of being right and not taking advantage of it. The reward definitely out weighs the risk at this cheap valuation.

    Good Luck!!

    Disclosure: I am long AAPL.

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