Apple is the world’s largest Co by Market Cap yet its book value fell by 33% over the last 24 months
Apple’s annual earnings peaked a year ago in 2018, they have fallen 7.7% to $55bn, they are paying a $14bn dividend.
Apple are currently 2/3rds of the way through a 2 year $175bn share buyback program, the World’s largest ever such program, (by comparison Microsoft, the world’s 2nd largest company has a $40bn buyback program).
Apple still has $200bn of cash but have taken on $109bn of debt, the gearing ratio is now 120%, its highest ever.
Apple has supercharged its share price, adding the equivalent value of JP Morgan in 2019 alone.
However, as the scale of the share buyback operation is so large, far exceeding its annual earnings the book value of the company has actually fallen by 33% over the last 24 months
Apple’s Price to Book ratio is now double the average of the last 5 years.
Apple is effectively spending its multi year cash pile on a short term share buyback program that can never be repeated in the near future (Profits – Dividends - Capex are $30 bn) and significantly reducing the book value of the company in the process.