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Did Tim Cook Signal Apple's Top?

Stocks in this article: AAPL MSFT GOOG

Apple is a for-profit organization, and as an executive Cook's fiduciary duty is to the shareholders. Cook is the steward of other people's investment. His comment fails the steward smell test for two reasons.

Allocating capital towards renewable energy such as solar panels and other related strategies isn't necessarily inappropriate for shareholders from an ROI point of view. The payoff may be debatable but investing in renewable energy sources is certainly reasonable in concept. Even the highly questionable efficacy of carbon reduction/mitigation efforts can reasonably be justified through expanded sales as a result of greater consumer goodwill.

But Cook didn't say he was allocating money because it was part of marketing and or will help lower future expenses. He clearly gave the impression that Apple will continue to spend undisclosed amounts of money on his subjective philanthropic goals.

Cook is worth hundreds of millions of dollars and continues to earn more. If he wants to spend money on noble causes, he certainly has the means to necessitate an impact. Why is someone of his wealth advocating shareholders spend money on causes he believes in? Why not use the funds to increase the dividend and allow shareholders to decide for themselves?

Dont take this the wrong way. I dont have an opinion on where Apple or any other company spends its money. But its fair to say at least some of the shareholders bought shares for monetary reasons. They may not enjoy a someone halfway to becoming a billionaire using company money instead of his own for reasons that dont benefit the company, and they have a right to know so they may adjust their portfolio if warranted.

The more troubling and second smell test failure is the suggestion someone -- anyone -- should sell their shares. There is no way to dance around what it means when a CEO says the company may not be your best investment choice. Maybe he's right, maybe Apple isn't the best investment choice. He certainly is in a position to know what performance shareholders can expect.

As a result, I'm partially taking Cook's advice and no longer recommending Apple as a strong dividend play. It doesn't mean you should sell, but my recommendations are based on ROI, not charity work.

Regardless of my level of approval of feel-good expenses, my objective is to make you money. What you do with it after you make it is your business.

At the time of publication the author had no position in any of the stocks mentioned.

Follow @RobertWeinstein

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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