What Apple And Einstein's Quote On 'Insanity' Have In Common
- Apple Inc. (NASDAQ: AAPL) shares continued their downward trend and have lost 8 percent since January 4.
- Global Equities Research’s Trip Chowdhry said that Apple's continued share repurchases resembled doing the same thing repeatedly and expecting different results.
Analyst Trip Chowdhry quoted Albert Einstein’s definition of "Insanity” as “Doing the same thing over and over again and expecting different results" in the context of Apple's massive share repurchases, which have been disastrous for shareholders.
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Apple has spent $110 billion in share buybacks and $43 billion in dividends. Chowdhry pointed out that for $153 billion, the company could have acquired BMW, Tesla and eHang, which would have “definitely helped in Apple's P/E expansion.”
Apple’s P/E multiples have contracted to 11.5x, versus the S&P500’s current P/E multiple of 20.5x. “Shareholders have lost a whopping $198 billion since the stock was at $134,” the analyst wrote, while adding that it was obvious that the share repurchases and dividends were not working.
Chowdhry further commented, “The current Apple CEO and CFO have completely deviated from Apple's foundational underpinning of "Think Different"…Apple's CEO Tim Cook and CFO Luca Maestri should be replaced by a Visionary and Passionate Jon Rubinstein as the CEO and Fred Anderson as the CFO.”
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