Another Year but the Same Old Story for Apple, Inc.

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There was a lot of posturing and calls for change, particularly in the way Apple (NASDAQ: AAPL  ) manages its massive cash hoard, leading up to the annual gathering of iFans at its shareholder meeting last year. Much of the angst was caused by one of Apple's largest shareholders, who made it clear he'd like to see more return on his investment. Another recurring them heading into the much-anticipated gathering was if Apple CEO Tim Cook would introduce a new product or at least address concerns about his, and Apple's, lack of innovation.

What's the big deal about a disgruntled shareholder calling for a policy change regarding Apple's cash pile, or investors chomping at the bit for a cutting-edge new product that would finally put their beloved iEverything maker back on top? Here's the big deal: Those concerns, and Cook's response to them, were running rampant heading into the shareholder meeting in 2013. It was just the same old story, with eerily similar verbiage, all over again.

Last year at this time, David Einhorn and his Greenlight Capital fund were calling for Cook and team to generate shareholder value by utilizing what was then $137 billion in ready cash. Einhorn, you may recall, won a court ruling heading into 2013's shareholder meeting canceling a scheduled vote against his proposed new preferred stock offering, iPrefs.

Einhorn and other Apple shareholders had reason to grumble, with its stock price down about 36% from its high the prior September, 2013's gathering came with high expectations that Cook and team would do something to give iFans reason to cheer.

Instead, when the discussion reached the much-anticipated Q&A phase, the time when a new product introduction would come -- if one were forthcoming -- Cook underwhelmed. He knew shareholders were "disappointed" with Apple's stock price, but investors should focus on the long term. And while there were no new products to hype, Apple was "working on new product categories" and giving serious consideration to the notion of returning some of its cash to shareholders.

Now, here we are in 2014, a few days removed from Apple's latest shareholder meeting. Thankfully for iFans, there were no problems with Einhorn. This time around, it was activist investor Carl Icahn getting on Cook's nerves by asking Apple to return cash to shareholders. Icahn gave up his campaign earlier than Einhorn did last year, but Apple's certainly seen this movie before. Cook did say that Apple would "consider" buying back as much as $60 billion by next year. Last year, Cook was "seriously considering" using Apple's cash to improve shareholder value. Sound familiar?

As for unveiling something new, Cook said Apple was "working on great new products," but wouldn't say what those were. Last year, Apple was, as per Cook, "working on product categories." Hmm. The nothing-new schtick followed Cook's "humorous" tease to attendees when he said he was going to "take the wraps off" new products, only to follow that up with "I'm just kidding. I gotta have some fun." Fun? Fun would be gaining back some of the 25% stock price loss since reaching $700 a share in the fall of 2012.

Final Foolish thoughts
Other than a few of the names and two or three of the specific words used, the Apple story hasn't changed since last year's meeting, nor have Cook's responses. If anything, with a nearly $159 billion cash hoard, one could argue that Apple's shareholder value concerns have grown. But the bigger problem is that the perception of Apple having lost its place as the king of innovation is now a reality. Heck, Apple can't even come up with anything new at its shareholder meetings.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 05, 2014, at 3:00 AM, Interventizio wrote:

    This company is resting on its laurels, and I consider it a value trap at this point.

  • Report this Comment On March 05, 2014, at 5:44 AM, luxetlibertas wrote:

    Tim Brugger: "But the bigger problem is that the perception of Apple having lost its place as the king of innovation is now a reality. Heck, Apple can't even come up with anything new at its shareholder meetings."

    How extremely uninformed. Shareholder meetings are not for presenting innovations or new products. As for complaining about the share price, blame Wall Street. Tim Cook does not and should not concern himself with the share price. If any, Apple profits from a lower share price by being able to buy back shares cheaply.

    And for the first part of the quote, calling something a reality does not make it so. If anything, it shows the bias of the author. Bias is unproductive in investing.

  • Report this Comment On March 05, 2014, at 7:23 AM, jdmeck wrote:


  • Report this Comment On March 05, 2014, at 9:47 AM, garysund wrote:

    I guess I am not a normalinvestor. I really don't care if Apple has complete control of the smartphone or tablet market. I don't care if they are no longer a growth company. What I do care about is that no matter what anyone says they just continue to earn billions every quarter after quarter. So what if one quarter is a billion more or less than the last quarter. The fact is I have a long term position with Apple to the point that my investment with apple is returning me now right around a 10% return just from the dividend and I am more than happy with that. At some point when it is least expected Apple will buy something big and shock the world. They will do it in their own time frame. The same with new products. They will come when ready. I totally believe that the day will also come when people will look back and see that Apple stock even at $600 a share was the cheapest stock around at that price. All of this is just going to take a little time. When I bought Apple stock it was around $100 a share and the word at that time was is was a broken company. When it hits $1000 a share it will still be called a broken company by some. Just not by me.

  • Report this Comment On March 05, 2014, at 9:58 AM, larryw101 wrote:

    Another year but the Same old story for Tim Brugger.

    Your articles are worthless and more so you know nothing about finance let alone Apple. Apple has always been extremely secretive about new launches. But obviously you are too oblivious to that.

    Since when are shareholder meetings for introducing new products?

    Find a new job. The few pennies a click you get from here are coming to an end....... quickly !

  • Report this Comment On March 05, 2014, at 4:37 PM, mky517 wrote:

    Another year, another i-Hater. Same ole, same ole. The stock AAPL is not an ATM machine. Sorry.

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Tim Brugger

Tim has been writing professionally for several years after spending 18 years (Whew! Was it that long?)in both the retail and institutional side of the financial services industry. Tim resides in Portland, Oregon with his three children and the family dog.

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