Apple’s (NASDAQ:AAPL) Cash ‘Hoard’ is Huge

Apple’s (NASDAQ:AAPL) Cash ‘Hoard’ is Huge

Apple’s (NASDAQ:AAPL) Cash ‘Hoard’ is Huge


Apple’s (AAPL) cash hoard, is so large, and has been for so long that many do not pay much attention to it anymore.

What the market analysts hear about the Apple cash stockpile now is that “it is really not that big when you take debt and potential taxes into consideration.”

That’s bunk!

AAPL’s cash hoard ranks as one of history’s largest treasure, it is a fortune taxes not withstanding.

As of Apple’s latest Quarterly earnings report, the company had $231.5-B in cash and marketable securities.

The Apple gross cash balance before debt or tax considerations, would be the 13th-largest company in the world; bigger than Wal-Mart (NYSE:WMT) and just a bit smaller than Procter & Gamble (NYSE:PG).

Apple cash hoard is mostly hoarded overseas, while Apple’s $72.4-B in debt is mostly domestic.

So, for argument sake let us say that Apple decided it wanted to be debt free,  and let us assume that Apple wanted to move its entire cash hoard stateside because it want’s to be America’s hero company.

And let us assume that Apple decides to pay the full 35% US corporate tax rate on its cash pile.

After taxes, Apple’s $231.5-B in cash becomes $150.5-B.

That would then put Apple’s cash hoard in the Top 30 largest companies in the S&P 500 on par with Phillip Morris International (NYSE:PM) and a bit smaller than IBM (NYSE:IBM), Disney (NYSE:DIS) and Pepsico (NYSE:PEP).

After stripping out the $72.4% in debt, the $150.5-B becomes $78.1-B.

That then is about 2X the average market cap of all S&P 500 and more than 4X bigger than the median market cap of all S&P 500 companies.

And, this assumes the absolute worst case scenario for taxes.

Should Apple really want to repatriate its cash, it would likely negotiate better terms. And if it waits until Donald Trump is US President the its tax rate would likely be close to 10%. That begs the question, why is Tim Cook supporting Hillary Clinton and not Donald Trump for President?

The Apple cash hoard is Big, no matter how you look at  it.

Symbol Last Trade Date Change Open High Low Volume
NASDAQ:AAPL 108.85 23 August 2016 0.34 108.59 109.32 108.53 21,217,300
HeffX-LTN Analysis for AAPL: Overall Short Intermediate Long
Bullish (0.38) Bullish (0.39) Bullish (0.36) Bullish (0.39)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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