NEW YORK (TheStreet) -- Billionaire investor Carl Icahn and Apple (AAPL) - Get Apple Inc. Report CEO Tim Cook will meet on Monday to discuss a potential share buyback, CNBC reported. Icahn added to his parcel of Apple shares earlier this month after stocks slipped 5.4% following the iPhone 5s and 5c release.
Icahn has been championing further share buyback activity from Apple since as early as August.
Last month, Icahn tweeted, "Had a nice conversation with Tim Cook today. Discussed my opinion that a larger buyback should be done now." Later, he elaborated, "Planning dinner in September. Tim believes in buyback and is doing one. What will be discussed is magnitude."
In the third quarter ended June 29, Apple repurchased 13 million shares, returning $18.8 billion to shareholders through dividends and share buybacks.
In May, Apple said $100 billion will be returned to shareholders by 2016 through a program of share buybacks and quarterly dividends.
Apple shares are up 0.72% to $485 as of 11:57 a.m. EST. A lower-than-normal trading volume of 4.73 million shares have changed hands, compared to the one-month daily volume of 15.2 million. Overall, Apple is outpacing the S&P 500 which is up 0.24%.
TheStreet Ratings team rates Apple as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate Apple a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- AAPL's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- AAPL's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AAPL has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- 41.67% is the gross profit margin for Apple which we consider to be strong. Regardless of AAPL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AAPL's net profit margin of 19.53% compares favorably to the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- APPLE INC's earnings per share declined by 19.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, Apple increased its bottom line by earning $44.16 vs. $27.67 in the prior year. For the next year, the market is expecting a contraction of 11.6% in earnings ($39.05 vs. $44.16).
- You can view the full analysis from the report here: AAPL Ratings Report
Written by Keris Alison Lahiff.