Analyst to Apple: Time to Stop hoarding Cash

Perhaps $46 billion in walking-around money is too much.

So argued a notable financial analyst on Thursday, saying it's time for Apple to do something with its colossal cash reserve that's better for shareholders. In an open letter to Apple's board of directors, Sanford C. Bernstein analyst Toni Sacconaghi urged Apple to either return some cash to shareholders as a dividend or increase the value of Apple stock by repurchasing its own shares.

"In our conversations with shareholders, one common source of frustration--which is now bordering on exasperation--has been Apple's burgeoning cash balance and the company's unwillingness to return it to shareholders or discuss its vision for how the company plans to use it. Apple's cash balance is of mythic proportions--higher than the total market cap of all but 49 of the S&P 500 companies, the highest among all U.S.-listed companies and growing," Sacconaghi wrote. "We implore you to consider returning cash to your shareholders, along with a longer-term road map for how you plan to use your cash balance and why."

Apple's cash has been earning interest at an annual rate of 0.76 percent--a "value-destroying" rate compared to alternatives. Instead, Sacconaghi recommended an immediate $30 billion share repurchase plan and a 4 percent annual dividend.