MW Two reasons to buy Apple's stock after its 24% decline so far in 2025

By Philip van Doorn

Also: Berkshire after Buffett, retirement planning and avoiding taxes, and what to think of the recent stock-market rally

Apple Inc. announced its quarterly financial results after the market close on May 1, and for one week through Thursday its stock was down 7.4%, while the S&P 500 rose 1.1%.

One reason cited for stock's decline following the earnings report was disappointment that Apple's $(AAPL)$ board of directors had added $100 billion to the company's stock-repurchase authorization - down from $110 billion a year earlier.

Mark Hulbert reviewed the history of Apple's buybacks and determined that the stock has actually performed better during periods of reduced stock repurchases.

Apple's shares were down 21% for 2025 through Thursday, while the S&P 500 SPX was down 3.3%, both with dividends reinvested.

More on Apple's report: Here's why Apple's stock is getting dumped despite solid earnings results

So Hulbert's observation and this year's price decline might support a case for buying Apple's stock now. But what if you are a long-term investor? Another look at the company's buyback history can provide some comfort.

According to FactSet's data going back 40 fiscal quarters, Apple has spent $697.7 billion on stock repurchases over the past 10 years. And the company's share count (upon which earnings per share are based) has been reduced by 35%.

But the effect on the company's earnings per share has been greater, which we can illustrate with an example:

-- A company's profit is $1,000.

-- There are 100 shares.

-- Earnings per share came to $10.

If we reduced the share count by 10%:

-- The company's profit would still be $1,000.

-- There would be 90 shares.

-- EPS would be $11.11.

-- EPS would have increased 11%.

For Apple, the 35% reduction in the share count has boosted earnings by 54% over the past 10 years, all things being equal. For 10 years through Thursday, Apple's stock returned 590%, while the S&P 500 returned 220%, both with dividends reinvested.

A housing-market reminder

During the period of superhigh demand for homes brought about by undersupply, the COVID-19 pandemic and low interest rates, some home buyers and lenders skipped the customary step of ordering an independent appraisal of a home's market value.

But things are different now, with 30-year mortgage-loan rates averaging 6.76% and 15-year rates averaging 5.89%, according to Freddie Mac. Those rates have softened demand for homes, and in many parts of the country, new construction has led to a significant increase in supply.

All of this means that you might be surprised at the state of your local housing market - and that an appraisal is critically important. Aarthi Swaminathan explained how the home-appraisal process works, while sharing the story of a buyer whose deal fell through because the appraised value of a house he wanted to buy came in much lower than the price he was willing to pay.

More housing market coverage: A real-estate giant wants sellers to list their homes privately. Will homeowners benefit?

You might be able to lower your property taxes

Property taxes are determined in various ways depending on where you live. And you might be able to challenge your county's assessment of your home's value, upon which your taxes are based. Andrew Keshner provided a guide on how to challenge your property-tax bill. Be sure you know the deadlines - if you are late, you will probably have to wait another year.

What to think of Berkshire Hathaway's stock now that Buffett is retiring

At Berkshire Hathaway Inc.'s $(BRK.B)$ annual meeting on May 3, Warren Buffett, the conglomerate's chief executive, said he would retire at the end of this year, handing the top job over to Greg Abel.

William Watts interviewed analysts who considered what Buffett's departure might mean for Berkshire's stock and how the company might change its management style.

Quentin Fottrell summed up Warren Buffett's advice on how to make investment decisions.

More: Buffett successor Greg Abel will have around $350 billion to use in making his mark on Berkshire Hathaway 2.0

A stock-market rally and a warning

Through Thursday, the S&P 500 was down 3.3% for 2025, with dividends reinvested, which was a far cry for the 15% drop investors were looking at a month earlier. So what should you think of this rally, driven in part by the anticipation of more trade deals for the U.S.?

Joy Wiltermuth looked into the thought processes behind the stock-market rally and previewed the action to come.

Related: Investors say this is 'the toughest investment climate' they've ever experienced

An investment craze might soon get a big boost

Joseph Adinolfi explained how trading in "zero days to expiry" index options has expanded over the years and may soon boom because of this change being considered by the Securities and Exchange Commission.

More from Joseph Adinolfi: The U.S. economy might be able to handle any disruption from Trump's tariffs more easily than Wall Street expects

Retirement planning and avoiding income taxes

In the Help Me Retire column, Alessandra Malito worked with a MarketWatch reader who wanted to limit tax consequences with an upcoming pension liquidation and 457 plan rollover.

In the Fix My Portfolio column, Beth Pinsker heard from a reader who shared his method of using annual partial Roth IRA conversions to avoid nearly all income taxes.

More for retirees and people building nest eggs:

-- Sitting on cash? Lock in this new Series I bond rate to protect your savings from inflation.

-- Six ways investing like Warren Buffett can boost your 401(k)

A speculative play for income

Michael Brush reported on nonbank lenders that focus on lending to the cannabis industry. These stocks can feature very high dividend yields, but you had better understand the risks.

Big Tech coverage

Here's a sampling of this week's coverage from MarketWatch's technology team:

-- 10 tech stocks that could rally up to 41% - and make good use of your money

-- Alphabet's stock is sliding on AI fears. Are investors overreacting?

-- Nvidia's Jensen Huang fears losing the Chinese market. One analyst says that's short-term thinking.

-- Palantir earnings show 'ferocious growth' fueled by AI

-- Super Micro cuts its outlook once again, now acknowledging possible tariff impacts

The Moneyist tackles an estate-planning conflict

Quentin Fottrell - the Moneyist - helped a reader with a complicated scenario involving a second marriage and two children apiece from previous marriages. Who should inherit what?

More from the Moneyist:

-- My ailing father's house burned down in the California fires. Will our brother, who took care of them, lose his inheritance?

-- I'm 65 and a widow with 5 children. Should I split my $1.1 million nest egg among them while I'm still alive?

-- 'I'm flabbergasted': My friend wants to borrow $5,800 to save his home from foreclosure. What should I do?

Want more from MarketWatch? Sign up for this and other newsletters to get the latest news and advice on personal finance and investing.

-Philip van Doorn

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 09, 2025 12:54 ET (16:54 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.