Apple, Inc.'s New CFO: "A Champion Of Shareholder Return"

Cash-rich with top-line growth slowing, Apple's choice of a shareholder-friendly new CFO is great news for investors.

Mar 6, 2014 at 7:15PM
Peter Oppenheimer

Apple CFO Peter Oppenheimer will retire in September. Apple has appointed shareholder-friendly Luca Maestri to take his place. Image source: Apple.

Apple (NASDAQ:AAPL) CFO Peter Oppenheimer will be retiring this year. Under his 18-year watch, Apple's annual revenue grew from $8 billion to $171 billion. With Apple's growth days behind it, the shareholder-friendly Luca Maestri that Apple has appointed to take Oppenheimer's place is great news for Apple shareholders.

A shareholder focus
Maestri is "a champion of shareholder return," said Barclays Capital analyst Ben Reitzes, cited by The Wall Street Journal. A former colleague of Maestri's from Xerox agrees. "He's very shareholder friendly in terms of making sure that the return to shareholders is balanced, whether that's dividend or share buybacks. He was very good at that at Xerox," Maggie Wilderotter told the Journal. Authors Daisuke Wakabayasahi and Emily Chasan added their own commentary in the WSJ article, "During [Maestri's] tenure, Xerox sharply increased its share repurchases, to $1.1 billion in 2012, from $700 million in 2011 and none in 2010."

Maestri's emphasis on creating shareholder value is certainly appropriate given that Apple has more cash on its balance sheet than ever before -- a whopping $158 billion in cash and marketable securities as of Apple's first fiscal quarter of 2014. Further, Apple is ultimately converting about $0.25 of every dollar into free cash flow, generating $44.2 billion in the trailing 12 months. With cash that far outweighs Apple's investment opportunities, a shareholder-friendly CFO is probably the most important thing investors want to see in a financial chief right now.

Apple Store

Of course, it would be tough to argue that Oppenheimer wasn't a champion of shareholder return as well. He initiated the largest capital return program in the history of the world and last year expanded Apple's plan to repurchase $10 billion worth of shares to $60 billion by the end of fiscal 2015 last year. Further, Apple has proven to be extremely opportunistic with its repurchases recently, spending $14 billion to repurchase shares after Apple stock recently sold off on less-than-expected fiscal 2014 first-quarter iPhone sales.

What can investors expect from Maestri?
Hopefully, more Oppenheimer-like moves. And given Maestri's history as a shareholder-friendly financial chief, this is a likely outcome. I wouldn't be surprised to see Apple continue boosting its dividend under Maestri's tenure. Last year, Apple boosted its dividend by 15% in April.

With Apple's gross profit margins stabilizing at very lucrative levels and top-line growth slowing, aggressive capital return programs are crucial in creating shareholder value. Further, Apple's stock still trades conservatively at 13 times earnings, bolstering the case for repurchases today. So, given the circumstances, Maestri's shareholder-friendly reputation is great news for Apple investors.

Wisdom from the world's greatest investor
Warren Buffett has made billions through his investing and he wants you to be able to invest like him. Through the years, Buffett has offered up investing tips to shareholders of Berkshire Hathaway. Now you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.

Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information