From Andrew Bary’s “Google’s Sundar Pichai Can Boost Alphabet’s Stock. These 4 Things Should Help” ($) in the Dec. 9 issue of Barron’s:
The executive shuffle [at Google], effective immediately, is getting Wall Street excited about the stock again. Alphabet (ticker: GOOG) shares rose nearly 4% in the days following last Tuesday’s announcement to a record close of $1,341 on Friday. The stock has advanced 29% this year, slightly ahead of the overall market but way behind the gains of other tech giants like Apple (AAPL) and Facebook (FB), which are up 70% and 53%, respectively…
No. 1: Boost the stock buyback. Third-quarter stock repurchases of $5.7 billion—more than double the $2.2 billion a year ago—are a start, but the company should increase the pace. Alphabet can sustain a $30 billion-plus annual buyback pace without denting its growing net cash position.
Apple, which has the most aggressive buyback program among the tech giants, has repurchased $67 billion in the past year and has been willing to draw down its cash holdings to do it. Alphabet’s buybacks, by contrast, have totaled $15 billion in the past four quarters.
While the number of outstanding Alphabet shares is down less than 1% in the past year, to 692 million, Apple’s is down 6%, to 4.5 billion. Since Alphabet began its buyback program in 2015, its share count is up 1%, while Apple’s is down 20%.
My take: Yes, Apple’s buybacks have been aggressive, something readers here appreciate, but which the general public might not. Didn’t Tim Cook tell Mad Money’s Jim Cramer that Apple’s repatriation tax windfall would be poured back into the U.S. economy?