A recent analysis of Apple's shares provides realistic optimism in describing the substance of its transactions as poorly described by GAAP. As observed by entertainer Jim Cramer, Apple's numbers will look much better when accounting standards allow immediate realization of Apple's hardware sales profits rather than causing it to recognize profits across the duration of service providers' wireless subscription contracts. Apple has supported the proposed accounting change. The impact on Apple's per-share metrics is given treatment at both the Financial Alchemist and on Jim Cramer's show; they are genuine, and material. The GAAP earnings numbers have confused people about Apple's sales and profits (to the benefit of Apple's ability to confuse competitors, but the detriment of shareholders looking to see appreciation based on current iPhone figures), and modifications to accounting principles to allow Apple to reflect the substance of iPhone sales transactions will make the whole of Apple's finances easier to comprehend.
However, the Financial Alchemist erroneously models future share values on the basis of share buybacks for which there is little evidence management will implement. While Apple has occasionally authorized share buybacks, it has not in recent memory retired serious share volume (it made some buybacks years ago while simultaneously printing dilutive shares into insiders' incentive plans, but never made a real net reduction). Everything in the Alchemist's analysis may be technically true -- a massive buyback would have a positive effect on Apple's earnings per share and thus its share prices at likely P/E multiples -- but this kind of buyback just lacks foundation in management's apparent motives, and certainly in its recent history.
Apple's shares may be reasonably priced, but not because there's a buyback on the horizon.