Moody's estimates that Apple Inc. (NASDAQ:AAPL) will see its cash hoard hit $170 billion in 2013, as long as the company doesn't return more value to investors.
Apple Inc. (NASDAQ:AAPL) is currently sitting on a cash reserve of around $137 billion, but according to a new report the hoard could reach $170 billion by the end of 2013. That estimate assumes the company doesn’t decide to return a large portion of its cash to shareholders this year, something investors like David Einhorn have been campaigning for.
According to Moody’s Corporation (NYSE:MCO) the Cupertino firm is likely to see its cash reserves increase by $35 billion in 2013, assuming there is no substantial change in the way the firm returns value to its investors. David Einhorn dropped his lawsuit earlier this month, but investors are still looking to get their hands on that cash.
According to the Moody’s Corporation (NYSE:MCO)’s report, “Unless Apple changes its philosophy towards liquidity/shareholder returns by increasing its $10 billion annual common dividend, or if Apple increases its stock buyback program, we estimate Apple’s cash balances could increase by another $35 billion in 2013 and exceed $170 billion.”
Apple Inc. (NASDAQ:AAPL) investors have been getting increasingly unhappy with the companies shares in 2013. The companies value less cash fell below $300 billion earlier in 2013, and is sitting just above that level right now. With more cash than any other company in the tech industry, investors are hoping the firm sees fit to redistribute it.
A report from Topeka Capital markets suggests that the creation of a higher dividend “safety net” aroundQ Apple Inc. (NASDAQ:AAPL) stock is the first step toward stabilizing the company’s stock price. The report puts a twelve month price target of $888 on the firm’s stock. Apple should, according to the report, make meaningful changes in the remainder of 2013 that will result in a push for a higher stock price next year.
One of the necessary moves is the opening up of new large market opportunities. Apple Inc. (NASDAQ:AAPL) is performing well in China, but faces intense competition. The opening up on new market opportunities seems to imply the release of a new product. The Apple iWatch seems the most likely at this stage, with the long awaited Apple Television still seems a long way off.
It seems unlikely that Apple Inc. (NASDAQ:AAPL) will manage to reach the $170 billion cash mark this year as investor pressure for a higher dividend mounts up. Today is the anniversary of the company’s announcement of its first dividend of the 21st century. Investors are hoping for a boost this year, and it seems likely they will get it.