Last week, shares of Apple Inc. (AAPL) surged to a new all-time high.
The advance helped AAPL cross an impressive milestone.
Today, the value of all the company’s shares combined totals more than $2 trillion. Talk about a gift to investors!
You would think investors would be thrilled with the company’s current CEO, Tim Cook.
But not everyone thinks he’s doing a good job.
I heard some scathing remarks about Cook’s leadership last week — even while the company’s value was crossing the $2 trillion mark.
Did Tim Cook miss an opportunity to make Apple a $3 trillion company?
Is that lofty valuation still in the cards for Apple?
Based on what I’m going to show you today, there may be plenty of room for Apple to run…
And plenty of other opportunities to take advantage as this tech powerhouse continues its trend.
Apple and the Parable of the Talents
“You wicked, lazy servant!”
Harsh words, but that’s the verdict handed down in the ancient Parable of the Talents from the Bible.
And Tim Cook has emerged as a modern-day version of this story.
In Parable of the Talents, a master heads out on a trip leaving three of his servants in charge of his money (“talents” referring to the currency at the time).
Two of the servants invest their portion of the money, earning a handsome return.
But one simply buries the money, then digs it up when the master returns.
The master is furious.
By simply burying the talents, the servant squandered an opportunity to do something productive with it.
It wasn’t just unacceptable — it meant the servant was “wicked” and “lazy.”
I was reminded of this parable when I listened to an influential investor discuss the latest news from Apple.
The mainstream media was gushing over how impressive Apple’s run to $2 trillion has been, making it the most valuable company in history.
But the investor argued that the stock could be over $3 trillion if Apple CEO Tim Cook had used its cash for buyout transactions.
Instead, Apple is sitting on more than $200 billion in cash that’s earning nothing for shareholders.
Think of it in terms of the parable of the talents…
Everyone who’s holding Apple stock — from everyday investors with a few shares to giant hedge funds and pension managers — effectively owns a part in the company.
And they’re all entrusting Tim Cook with this cash. He’s essentially a “servant” of Apple’s investors, yet he’s letting a big chunk of their money sit completely idle.
Just like in the parable, this is unacceptable.
But if my hunch is right, Cook’s “wicked, lazy” days could be nearing an end — giving you a chance to position yourself for some great overnight buyout gains!
What’s The Best Way to Spend $200 Billion?
The professional investor I was listening to last week had one suggestion for Tim Cook that he kept repeating over and over.
“Be a visionary Tim… do SOMETHING with the money… make an ACQUISITION for goodness sake!”
This guy owned millions of dollars worth of AAPL shares.
And he was furious at Tim Cook for sitting idly by while $200 billion rotted in the company’s bank account.
“If Tim Cook would use Apple’s cash for buyout transactions, it would not only help keep the stock moving higher, it would also cement Tim’s legacy as a great leader!”
I can guarantee you that Tim Cook has been hearing this complaint for some time.
But now that influential investors have taken to the prime-time media, pounding the table for Apple to do something with its cash, we’re going to see some action soon.
It also helps that interest rates have dropped to essentially zero, which makes it even more criminal for AAPL to be sitting on so much idle cash.
With so much pressure on Tim Cook to make an acquisition with the company’s $200 billion, we’re bound to see some big Apple buyouts in the next few weeks.
There are two primary ways that investors can profit from these buyout transactions.
Allow me to explain…
First, you can simply own shares of AAPL.
When Tim Cook uses Apple’s cash for worthwhile buyouts (helping to grow the company’s profits), you’ll naturally see the value of your shares rise.
And bigger profits may eventually convince Apple’s board to boost the company’s dividend.
But a more aggressive way to profit from Apple’s future buyouts would be to own shares of companies likely to be bought out.
When a buyout transaction takes place, shares of the company being bought typically surge higher overnight.
That’s because buyouts typically happen at price points well above where the stock is currently trading.
A buyout transaction has to be approved by the majority of shareholders. And the only way to ensure that shareholders will vote in favor of a buyout is to offer a high price.
Once that offer is made, shares jump to a price close to where the buyout has been offered.
Bottom line: as Tim Cook acts to defend his legacy (and becomes a good steward of the cash investors are entrusting him with), buyout transactions should give us multiple ways to profit!
My team and I have been actively searching for the best buyout candidates that could be in Apple’s crosshairs.
And we’ll be carefully tracking the best Apple buyout opportunities for you to profit from.