On Monday investors were taking a hard look at Apple after the tech titan announced plans to use its $98 billion cash hoard to pay a dividend and buy back shares.
On the news, bulls sent Apple higher. However, if you’re among those investors buying Apple because it’s now a dividend paying stock, the Fast Money pros think you’ve got it wrong .
Traders Stephen Weiss and Joe Terranova call the dividend 'a side show.' Top hedge fund manager Jeff Keswin calls the dividend a 'policy of appeasement.'
Analyst Tony Sacconaghi considers it ‘less than meaningful.’
The dividend works out to $10.60 annually, or 1.8 percent of the current stock price. That annual yield — how much the company pays out in dividends compared to its stock price — is below that of other big technology companies like Microsoft , currently at 2.5 percent, and Hewlett-Packard , at 2 percent. "The expectations were for a 2-2.5% dividend,” adds Sacconaghi.
All told the pros are less than impressed.
However, that’s not to say the pros don’t see reason to buy Apple – they do. But they say a long position in Apple should be a play on the company’s growth potential. "Apple should be a play on the company's future," says Weiss. "The dividend is simply, something nice."
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Trader disclosure: On Mar 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Terranova is long VRTS; Terranova is long NXPI; Terranova is long IBM; Terranova is long MCD; Terranova is long CNX; Terranova is long EMC; Terranova is long MSFT; Terranova is long JOY; Terranova is long OXY; Terranova is long LQD; Terranova is long POT; Terranova is long TBT; Terranova is short April Gold futures; Terranova is short May Silver Futures; Weiss is long QCOM; Weiss is long BRCM; Weiss is long SNDK; Weiss is long HPQ; Weiss is long TBF; Weiss is long TBT; Weiss is long HAIN; Weiss is short JCP; Weiss is short AAPL puts
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Mit Shah of Bernstein Research maintains a long position in Apple Inc. (AAPL).
Bernstein currently makes a market in the following companies AAPL / Apple Inc.
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