With the recent upsurge in the value of Apple Inc. (NASDAQ:AAPL) shares, investors and journalists such as Kate Kelly, Kevin O’Leary and Bert Dohmen are at arms about how stocks are still soaring even in a neutral market. Both Kelly and Dohmen seem to be questioning this occurrence from a leadership standpoint but the rebuttal by Kevin O’Leary gives them food for thought on what value investors are really looking for.
Since the death of Apple Inc. (NASDAQ:AAPL) founder, Steve Jobs in 2011, Tim Cook was appointed CEO and has been running operations. The company has released several devices from that time until now, many of which have not been very successful on the market due to a rapid increase in competition from Samsung and other smartphone manufacturers. It is with this in mind that investors are questioning the types of decisions being made by the company’s CFO that would have the value of their stock on a constant increase.
Bert Dohmen reiterates that currently as much as eighty-eight per cent (88%) of Apple Inc. (NASDAQ:AAPL)’s cash flow resides outside of the borders of the US while they are selling debt to distribute cash back to shareholders via dividends and stock purchases. This in turn causes the value of the stock to increase rapidly as the demand for the stock is increasing. Bert Dohmen advises that this is not safe as investors would be using “after-tax money” to buy stocks and get “pre-tax returns”. He urges buyers to be cautious and to know what they are doing. On the other hand, Kevin O’Leary is excited to buy into stocks such as this and he isn’t at all concerned about the sale of the products themselves. He believes that whether or not Tim Cook inherited bad leadership decisions, he seems to have developed a winning formula and one that has people investing in Apple Inc. (NASDAQ:AAPL) even when the overall stock market is at a standstill at this time.
If you want to see more about what is happening with this discussion, check out the CNBC video.