Apple has spent more than $800 billion on buybacks since 2012
On May 2nd, Apple’s board of directors authorized an additional program to repurchase up to $110 billion of the company’s common stock. The company has spent more than $800 billion on buybacks since 2012.
Mark Hulbert for MarketWatch:
[A]ccording to Birinyi Associates, May was a “record-setting month for announced buybacks,” and “2024 is the second-highest ever in the number of [buyback] announcements as well as the value of announcements.”
A big part of why May set a record for buyback announcements was Apple’s announcement of a $110 billion stock repurchase program — the “largest single program announcement on record,” according to Birinyi Associates. All told since Apple began repurchasing its shares in 2012, it has spent more than $800 billion on buybacks.
Apple’s outsized role prompted me to examine its record as a market timer when executing repurchases… Apple’s average total return subsequent to above-average buybacks was lower than in the wake of below-average repurchases. Not impressive market timing, in other words. Still, given the significant variability in Apple’s quarterly returns, the differences in the chart are not significant at the 95% confidence level that statisticians often use when determining if a pattern is genuine.
The root cause of lousy market timing is what Edward Chancellor, the financial historian and investment strategist, calls the “capital cycle.” During the up phase of this cycle, he argues in his book “Capital Returns: Investing Through the Capital Cycle: A Money Manager’s Reports 2002-15,” high profitability and plentiful liquidity leads to corporate overconfidence and a loosening of “capital discipline.”
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MacDailyNews Take: Bottom line: Apple needs to better follow Warren Buffett’s advice when executing AAPL buybacks:
Be fearful when others are greedy and greedy when others are fearful. – Warren Buffett
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