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Apple: The Most Undervalued Large-Cap Stock in America

post #1 of 214
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In light of the recent sell-off in global equities, it is now an incontestable FACT that Apple is the most undervalued and underappreciated large-cap growth company in America. The stock trades at an extremely depressed valuation that Wall Street isnt taking seriously (8.25 P/E Ratio), the companys growth continues to outpace every large cap company on the entire S&P 500, and the companys growth rate percentage defying all laws of gravity continues to accelerate without any sign of abating.

Every quarter that goes by, Apple reports another multi-year record high growth rate that continues to be brushed aside and overlooked by investors. Apples stock performance relative to its valuation and fundamentals, and relative to other companies with lower growth rates and more expensive valuations is completely abysmal.

In its recently reported fiscal Q3 2011, for example, Apple reported a 6-year record-high growth rate of 121.94%. Yet, one would never know this by listening to CNBC, Bloomberg or reading the average article from The Street.com or Business Insider. Instead, the only stories you will see are ones that dont really matter in the grand scheme of things.

For example, instead of pointing out how the company reported 122% earnings growth in fiscal Q3 or the fact that the company trades at a 13 P/E ratio, CNBC is quick to point out how iPod sales an operating segment that makes up only 4% of Apples total revenue is slowing. Nevermind the fact that iPhone sales grew over 140% four times the smartphone market from 8 million units to 20 million units in fiscal Q3 or the fact that Apples revenue has almost tripled in 2-years.

Stop the presses because iPod sales which produces less in revenue than iTunes is now slowing. And it wouldnt be so bad if the press merely only reported these inconsequential facts. But its not just that. Its the highly misleading and faulty conclusions drawn from these inconsequential facts that have been so damaging for the stock over the years. If it isnt the Zune iPod killer, or the Android iPhone Killer, then its the Amazon Kindle Fire iPad Killer which amounts to nothing less than the obvious end of Apple. Forget about reporting the actual facts or the news, everything is now editorialized.

No one cares to report that iPhone sales outpaced the market by 400% or how extraordinary it is for a company of Apples size to see accelerated revenue growth of 66% leading to sales of $108 billion in 2011. Or that you would have to go back to 2004 when Apple was reporting less than $1.00 in EPS to find a year with a higher EPS growth than the 82.71% Apple recorded in 2011. True story. See below.




There seems to be an ever-present sentiment-war being waged against Apple as it is constantly hit from all sides in a very concerted way. And this is not something new. Its been going on for years with Apple. With the recent passing of Steve Jobs, it has only gotten much much worse. Im here to try and balance the scales a little by reminding everyone about the simple truth concerning Apple. While the companys earnings have absolutely skyrocketed since 2008, to the dismay of investors and to the delight of Business Insider, the stock has gone nowhere.

In late 2007, Apple traded at $200 a share after reporting $3.93 in EPS on $24.5 billion in revenue. Turn the pages to 2011 and its an entirely different company. In just four years, Apples earnings have grown 600% to $27.68, and its revenue skyrocketed 341% to $108.2 billion. Thats the most explosive 4-year growth rate of any large-cap company on the entire S&P 500.

Yet, one wouldnt know this given the stocks very sluggish performance, extremely depressed valuation and the medias permanently negative sentiment on the stock over the past few years. The stock is now trading at an extremely low 13.1 trailing P/E ratio. Were talking about a valuation level that Apple hasnt seen in nearly a decade this despite the fact that the company grew its earnings 82% this year which is the highest in over 7 years. Were talking about a valuation that is more than 10% lower than the lowest point during the financial crisis. See below:



And even though Apple has grown its earnings by 600% in four years, the stock has only risen 81%. And while 81% might seem like a lot, just remember that the company is essentially 7x larger than it was in 2007. Apple has also grown its balance sheet 5-fold since that time and its cash has also risen 5-fold. You would expect to see at least a 200-300% move in the stock, and if history repeats itself, you soon will.

The chart below should give you an idea of how poorly Apple has performed relative to its growth. On the first day of 2008, Apple traded at $200.50 a share. It had $3.93 of earnings under its belt at the time. Today, the company has $27.68 in earnings and only trades at $363.57 (as of Friday) which is merely 81.3% higher. This versus the 600% in earnings growth over the same period.



The companys earnings growth accelerated dramatically in 2011 as it reported an 82.7% earnings growth rate. Yet, apparently an 82.7% earnings growth rate isnt good enough to give Apple a valuation that is higher than Ciscos (CSCO) 15.11 P/E ratio (earnings contracted in 2011), Oracles (ORCL) 16.35 P/E ratio (less than half of Apples earnings growth) or Googles 19.19 P/E ratio (grew 15% this year).

Over the past year, Apple has been taken to the woodshed on every sell-off in the market. It also significantly underperformed the S&P 500 on the entire QE2 melt-up rally between October 2010 and June 2011. And before you think its because Apples earnings must be slowing, thats clearly not the case. Apples earnings have actually accelerated in 2011. Not just grown, but accelerated. Theres a key difference. The growth rate is higher in 2011 than in 2010, 2009, 2008, 2007, and 2006. Basically, Apples earnings growth rate this year is higher than in any year since the advent of the iPhone. Talk about acceleration in earnings. And yet the stock has gone nowhere this year. See below:



Now if that doesnt shock you, then this will. In fiscal Q2 2011, Apple reported a 6-year record high growth rate of 92.19% in earnings and 83.22% in revenue. That shatters the previous record of 86.03% earnings growth in fiscal Q2 2010 and 74.39% revenue growth in fiscal Q4 2008. After this report, Apple collapsed 14% over the next 3-month period on concerns that (insert any B.S. reason here). So after reporting the highest revenue and earnings growth rate in 6-years, Wall Street sells the stock down by $50.00 on the quarter leading to further massive P/E contraction.

And if that isnt enough to convince you of how mistreated the stock is relative to its growth, in the very next quarter fiscal Q3 2011 the company absolutely shatters fiscal Q2 2011′s growth rate in every way. The company recorded 121.94% earnings growth which is the highest quarterly growth rate since 2004. You would have to go back almost 8-years when the iPod was just getting started to find a quarter with a higher quarterly growth rate on earnings.



Yet, despite this incredible year that Apple has reported, the stock is trading lower than it did 10-months ago and is now almost lower than it was a year ago. The company has accelerated and doubled its earnings, and is almost down on the year. It trades at under a .5 PEG ratio and less than 8x next years earnings.

In spite of growing its TTM by 82.7% which is higher than every single large cap company in America Apple now trades at decade-low P/E ratio of 13.13. At the beginning of the year, the company traded at $364.90, which is a little more than $1.00 above Fridays close. That means that even though the company grew its earnings by almost 100% on the year, the stock went nowhere. The chart below shows Apples growth in its trailing 12-months of earnings over the past several years:



One would think that with such a nice consistent rise in Apples trailing 12-months of earnings that the stock would would a nice consistent rise as well. But instead, what weve seen is the stock undergo a very brutal 2-year period of massive P/E compression. In fact, Apples P/E ratio has fallen just about 59.12% in just 8 quarters which means that the companys earnings are discounted by about 60% more than they were valued at the start of 2010. See below:



Apple is now trading at the S&P 500 average valuation of 13x despite growing its earnings at a pace that is higher than the top 100 S&P 500 stocks and higher than 90% of the stock listed on the index. By pricing Apple at $363, the market is saying that Apple is worth no more than the average stock. 66% revenue growth and 82% earnings growth isnt valued at all. Neither is Apples $100 billion cash (including fiscal Q1 2012) nor its entire balance sheet for that matter. In fact, Apple is now valued below the average stock trading on the NASDAQ-100 which suggests that the market believes that it is better to hold the NASDAQ-100 (QQQ) than it is to hold Apple from a valuation perspective.

Now even though Apples growth has far and outpaced the growth of Oracle (16.35 P/E), Amazon (96.15 P/E), Google (19.19 P/E), Cisco (15.11), Qualcomm Inc. (20.62), Amgen, Inc (13.53), Comcast (15.11 P/E), IBM (13.95 P/E), Chevron (13.50), Johnson & Johnson (14.94 P/E), Procter & Gamble (15.49 P/E), and AT&T (13.91 P/E), the stock trades at a far lower valuation relative to these top holdings on the NASDAQ-100 and S&P 500. Some of these companies have actually contracted in 2011. Yet, the market values the earnings out of these companies on the order of 4-5 times more in some cases than they value the earnings out of Apple.

Light at the End of the Tunnel

The whole point of this article is to establish one thing and one thing only. That Apple is extremely undervalued contrary to what you might hear in the financial press. By demonstrating that the company is this undervalued, we will then be able to make a very compelling case for why this cannot go on forever. Eventually, Apple will hit an inflection point where this 2-year phase of P/E compression comes to an abrupt end. Apple is already valued below the S&P 500. If the earnings continue to come in anywhere close to 50% which is far below the 70-82% weve seen in the past 3-years, then the stock will have to rise significantly in order to merely maintain its depressed valuation.

For example, in order for Apple to maintain its depressed 13.13 P/E ratio going into 2012 and 2013 which is right at the average on the S&P 500 the stock will have to rise to $577.72 next year. Most good analysts are expecting the company to report about $44.00 in earnings next year and about $55.00 in earnings in 2013. That would be 62% and 25% growth respectively. Thats far below the growth Apple has posted over the past four-five years (see above). Remember, Apples growth is currently accelerating and completely discounted. This outlook presupposes significant deceleration in the growth rate as the result of the law of large numbers. Yet, what you should take from this analysis is that Apple has nowhere to go but up.

Suppose the stocks valuation were to contract further to a 10 P/E ratio within the next two years. Even if we get that level of P/E contraction which would be at a level that is far below the average on the S&P 500, the stock would still trade at $550 a share 2-years from now on the assumption of 25% growth between 2012 to 2013. What happens if the growth stays in the 60-70% range? What happens if the growth continues to accelerate? Neither of those scenarios are anywhere even close to being priced in. In fact, Wall Street is currently modeling for massive contraction in the growth rate. Thats an unwise decision given that Apple just guided fiscal Q1 2012 this quarter for 80% earnings growth. Notice, Wall Street is modeling for 25% growth while Apple has guided for 80% growth. Who do you believe?

In future articles, we will build a case for why Apple is reaching a floor in this age of P/E compression, and is about to undergo one of the biggest rallies in the companys history. As the valuation becomes more depressed, the case becomes even more compelling and the chances for a massive Apple upside correction increase dramatically. Stay tuned.

Andy M. Zaky is a fund manager at Bullish Cross Capital, an Appleinsider contributor and runs the financial newsletter, Bullish Cross. Bullish Cross Capital owns Apple as a major holding in the portfolio.
post #2 of 214
Quote:
In future articles...

What - this one wasn't enough?!?
post #3 of 214
Apple is SO mistreated!

The press doesn't treat them very well. Nobody love them. Not even the stock market appreciates Apple!

It isn't FAIR!
post #4 of 214
I agree the stock is completely undervalued, as the article points out again, and again, and again. And as anyone who is so inclined can see for themselves if they analyzed Apple's 10q/k's (tip of the hat to Andy for doing the extensive amount of legwork, though).

I'd be much more interested in a discussion of just WHY apple is so undervalued and why the CNBC-types are so useless (the story that iPod sales are slowing is a tragic miscarriage of journalism and the reporters / producers of that segment should be fired). So, why are they so bad? Why is the stock so undervalued?
post #5 of 214
Even though I'm aware of aapl's true potential growth, it still amazes me when it's broken down in such a E
easy to understand way as it was in this article. P/E compression can only go on for so long before the stock price can no longer be held back.

Great read - great reminder IMO
post #6 of 214
Wow.....amazing what you get here on these interwebs....financial advice on a Apple fanboy site...

Someone should check how much Apple stock this Zaky guy owns, and what his vested interests are in this...
post #7 of 214
I knew AAPL was getting under valued more and more on each down cycle, but this really puts it into perspective. The idea of a P/E compression "floor" while Apple continues to grow like crazy is a very, very bullish idea. Looks like the January earnings report may be the farewell song to the APPL bears. Prepare for liftoff.
post #8 of 214
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Originally Posted by AppleStud View Post

I agree the stock is completely undervalued, as the article points out again, and again, and again. And as anyone who is so inclined can see for themselves if they analyzed Apple's 10q/k's (tip of the hat to Andy for doing the extensive amount of legwork, though).

I'd be much more interested in a discussion of just WHY apple is so undervalued and why the CNBC-types are so useless (the story that iPod sales are slowing is a tragic miscarriage of journalism and the reporters / producers of that segment should be fired). So, why are they so bad? Why is the stock so undervalued?

It's really simple. You don't buy a stock based on what it did in the past or even what it did today. You buy a stock for its future performance.

It's quite obvious that the market doesn't have much faith in Apple without Jobs, and the underwhelming launch of the iPhone 4S didn't help. And yes, I'm well aware of the spin of the fastest selling iPhone ever -- a complete miracle considering it went on sale in far more countries the first day than the iPhone 4 did.

The percentage growth rate AAPL has been on has been stunning, to be sure. But the low P/E indicates that the market, as a whole, thinks the ride is over and that kind of growth is not going to continue. Especially sans Jobs.

Statistically, AAPL is undervalued for its current earnings. No doubt. But I know a great many people who now won't touch AAPL stock.
post #9 of 214
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Originally Posted by ConradJoe View Post

Apple is SO mistreated!

The press doesn't treat them very well. Nobody love them. Not even the stock market appreciates Apple!

It isn't FAIR!

I agree. What is really interesting is Apple makes great products. People are flocking to the Stores in groves. But yet there are massive amounts of people out there who hate Apple. I don't hate PC with windows. But yet people diss my Mac Pro, MB Pro, iPhone, iPad and iPod. Yet I enjoy them and don't see the problem they seem to point out to me. Its kids weird.
An Apple man since 1977
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An Apple man since 1977
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post #10 of 214
As it is hard to refute facts, it is quite amazing that these facts aren't discussed in the media.
post #11 of 214
The market's heading down. Apple's along for the ride like everyone else. Buy it back on the upswing.
post #12 of 214
Great analysis, really lays it out. The market can't figure out Apple because there has never been an ULTRA CAP company before. You have to. "Think Different" to get the impact of this truly unique asset class. The so called "analysts" try to measure Apple against historic standards. Point is, as your detailed analysis shows in no uncertain terms, there are no "comps" when it comes to Apple and it's unprecedented growth. Can't wait to see future articles.
post #13 of 214
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Originally Posted by Asherian View Post

It's quite obvious that the market doesn't have much faith in Apple without Jobs.

What's this based upon? Most of the data is Apple w/ Jobs. And if you're counting medical leaves, AAPL has hit all-time highs in share price w/out Jobs as CEO, as in 2011.
post #14 of 214
Quote:
Originally Posted by Asherian View Post

It's quite obvious that the market doesn't have much faith in Apple without Jobs, and the underwhelming launch of the iPhone 4S didn't help. And yes, I'm well aware of the spin of the fastest selling iPhone ever -- a complete miracle considering it went on sale in far more countries the first day than the iPhone 4 did.

It is the people who call it underwhelming who are desperately spinning. If somebody was unimpressed, then good for them, that is merely their opinion. And their opinion apparently doesn't matter much, since nobody else bothered to listen to these whiny people. There was record demand for the iPhone 4S just in the USA alone (without those extra countries), so your point about it being available in more countries is a moot point.
post #15 of 214
Would prefer not to have the thread degenerate into fanboy/anti-fanboy flames. Back to the article...I think it summarizes valid financial fundamentals wrt AAPL earnings, revenues, and share price over recent history. There is no doubt that AAPL is valued at lower ratios compared to peers (S&P large caps or large cap techs). Clearly, AAPL is also a cash machine when looking at its balance sheet as well as current cash flows. I personally am interested in how best to capitalize on the situation. If GOOG were similarly undervalued, I, as an investor, would approach it the same. Regardless of my feelings about Android or iPhone. What's the investing opportunity? That's the real question. And frankly, given the recent pullbacks in the markets, even if you take an absurdly conservative P/E (10) and AAPL's likely 2012 earnings, you get a price a lot closer to $450 than $360...and that seems to be an easy opportunity for common stock and/or option plays to make a lot of money. Go ahead, Wall St and public, undervalue AAPL, I'd like to bank on it.
post #16 of 214
They're all Windows users. They figure that if they don't use the computers, how good can they be? So the weakest link becomes their strongest argument.
post #17 of 214
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Originally Posted by frugality View Post

Wow.....amazing what you get here on these interwebs....financial advice on a Apple fanboy site...

Someone should check how much Apple stock this Zaky guy owns, and what his vested interests are in this...

Troll much?
Be who you are and say what you feel,
because those who mind don't matter and
those who matter don't mind
--Dr. Seuss
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Be who you are and say what you feel,
because those who mind don't matter and
those who matter don't mind
--Dr. Seuss
Reply
post #18 of 214
Apple has gotten the brick upside the head for being great. It gets treated like it's Tebow when it's really Brady. A bust-out would be sweet.
post #19 of 214
Part of the problem is the Stock market has long since drifted from a place to invest money. Investing means contributing money to a company to help it grow and to benefit from that "investment" if the company does in fact grow. Now, however, with the concept of short selling (and all the off shoots of that) the stock market has become nothing more than legalized gambling. You short the stock if you are gambling the stock will go down. Those who short the stock have a build in incentive to drive the price of a stock down. That is not investing. Further, it directly hurts businesses to have forces purposely rooting for its stock to go down, in turn, hurting real investors. What really stinks is those who short stocks are allowed to borrow the stocks of those who are so called investing of the stocks to work against the investors to try and drive the price down.

Moreover, this article nicely shows why the concept of investing is dead. If the markets were investment driven by any calculation Apple's stock price would be significantly higher.
post #20 of 214
Quote:
Originally Posted by Asherian View Post

... the underwhelming launch of the iPhone 4S ...

It's impossible to take anything you say, ever, seriously when you say complete nonsense like this. It indicates that either you are here to dishonestly propagandize or that you are utterly clueless.
post #21 of 214
Being that the guy clearly discloses his company holds a significant amount of Apple, I fail to see the reason why the checking should go further than that. Holding Apple stock doesn't undermine the point of his article. Further, he has done more then folks like Jim Crammer has done.

Quote:
Originally Posted by frugality View Post

Wow.....amazing what you get here on these interwebs....financial advice on a Apple fanboy site...

Someone should check how much Apple stock this Zaky guy owns, and what his vested interests are in this...
post #22 of 214
It's unfortunate that no one but the British will properly parse the sarcasm pasted all over this article. Without a doubt the best AI article I've read in a long time.
post #23 of 214
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Originally Posted by Mister Snitch View Post

The market's heading down. Apple's along for the ride like everyone else. Buy it back on the upswing.

If the share price doesn't go up, in another few years AAPL will have accumulated more earnings per share than its stock price. That is, it will have accumulated $400 billion in cash and other assets. The stock price is obviously going to start going up before that happens, so it's just a question of when. It could be soon. So I wouldn't be so sure the stock will keep going down with the market.
post #24 of 214
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Originally Posted by AppleStud View Post

I agree the stock is completely undervalued, as the article points out again, and again, and again. And as anyone who is so inclined can see for themselves if they analyzed Apple's 10q/k's (tip of the hat to Andy for doing the extensive amount of legwork, though).

I'd be much more interested in a discussion of just WHY apple is so undervalued and why the CNBC-types are so useless (the story that iPod sales are slowing is a tragic miscarriage of journalism and the reporters / producers of that segment should be fired). So, why are they so bad? Why is the stock so undervalued?

and? Citigroup trades at less than book value and so is Bank of America and many other stocks...investor look ahead not at present and the world economy is in a slump and Stock markets will continue to fall..live with that..

"Apple people have no objectivity when it comes to criticism of Apple.." Lenovo X1 Carbon is out..bye bye MBAir

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"Apple people have no objectivity when it comes to criticism of Apple.." Lenovo X1 Carbon is out..bye bye MBAir

Reply
post #25 of 214
Fantastic article Andy, thanks for publishing it.

I've been an Apple investor for a few years and the facts in the article hold water.. Apple is still experiencing amazing growth, and despite the "high price" of Apple stock near $400, IMO the shares are still very cheap.

The PE Compression concept is huge and could lead to a major run in the stock price once it bottoms around 10.

Anyone who thinks AAPL is a bad investment, or expensive, or a good short opportunity is a fool IMO.


DISCLAIMER: I'm very long AAPL.
post #26 of 214
Quote:
Originally Posted by anonymouse View Post

It's impossible to take anything you say, ever, seriously when you say complete nonsense like this. It indicates that either you are here to dishonestly propagandize or that you are utterly clueless.

Somebody claiming that is simply trolling and/or lying. Reality and all of the facts contradict what they claim.

Sprint today reported its best ever day of sales in retail, web and telesales for a device family in Sprint history with the launch of iPhone 4S and iPhone 4.

http://newsroom.sprint.com/article_d...rticle_id=2073

“We are on track to double single day record for activations.This may produce slower activations for some: systems continue at record levels.”

http://twitter.com/#!/ATT/status/124966650196930560

Yep, that's the classic definition of an underwhelming launch.

Did you see Michael Phelps win all those medals in the Olympics? That was a pretty underwhelming feat too.
post #27 of 214
Quote:
Originally Posted by ConradJoe View Post

Apple is SO mistreated!

The press doesn't treat them very well. Nobody love them. Not even the stock market appreciates Apple!

It isn't FAIR!

What happened? Did you just take a 'teenager pill'?
post #28 of 214
What an odd article. Is it news, rumor, review, or other?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #29 of 214
Come on...this article isn't going to help Apple...various companies had got their peak era and then fell down...Apple days are over...the 'i' is soon going to be replaced.
post #30 of 214
Quote:
Originally Posted by eddierite View Post

Would prefer not to have the thread degenerate into fanboy/anti-fanboy flames.

Heh. You're new here.
post #31 of 214
Why are all these newcomers posting here? Was this thread linked from somewhere?
post #32 of 214
Sound like someone has margined his apple shares and is getting nervous.
post #33 of 214
Quote:
Originally Posted by Apple ][ View Post

Why are all these newcomers posting here? Was this thread linked from somewhere?

I wonder how you define newcomer?


...

As I reread "Hackers: heroes of the computer revolution" I can't help but think of Apple and its origins. Very, very few people got it then (in the Homebrew Computer Club Days), very few get it now. As some from the early hackers from MITs day..but much more so from the later Stanford's labs times...grokked "it" - so does the common person grok "it" - the "it" which Apple offers....the simple experience of working with electronics..manifesting in a very simple, human-oriented way. Analysts and the general market look at Apple and think "no way" - simply because they can't get where Apple is coming from..and somehow continue to believe that Apple's performance..Apple's appeal to the regular person..well, they think it's some sort of anomaly. They never got that computers are desired by people who don't really want to own a computer..or anything recognizable as such. Yet, still, MS and every other corporation out there continue to build devices and tech as if people really, really want to spend all day messing about with complexity. Well, they don't. Not at all. But, for some reason, this punch-card, IBM mainframe worshipping mentality simply can't believe that simple fact and, therefore, continue to look at Apple's performance like it's Moses parting the Red Sea. People want "machines of loving grace" not complicated devices with non-human oriented interfaces. As long as Apple continues to build machines for the masses who don't want machines..they will continue to do very, very well.
an aye for an eye, the truth is a lie; a fish cannot whistle & neither can I.
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an aye for an eye, the truth is a lie; a fish cannot whistle & neither can I.
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post #34 of 214
Why does this stock booster article (by a company that owns stock) claim P/E of 8.25 on the front page when the actual P/E is 13? No self interest in making it look even more "undervalued"?

Microsoft isn't growing like Apple but they have still doubled earning over years ago, yet their stock is exactly where it was at half the earnings such that Microsoft's P/E is actually around 8.
post #35 of 214
Quote:
Originally Posted by user23 View Post

I wonder how you define newcomer?

As somebody who has one post to their name?

post #36 of 214
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Originally Posted by AppleInsider View Post

and the companys growth rate percentage defying all laws of gravity continues to accelerate without any sign of abating.

First, I myself am long Apple. I'm an enthusiastic user and an aggressive investor. That said, I'm not sure what the signs of slowing growth will be, when in fact Apple's growth does slow. And it does have to slow eventually, right? If the growth continues at its current rate, AAPL is going to suck up all the money in the stock market, and that's not actually possible. I suspect that when the growth does slow, it's going to come in the form of bad news at a quarterly report.

So while it's true that we probably can't find any other companies with comparably high growth rates AND such a low P/E, I don't think we can find many companies with comparably high market caps and such a HIGH P/E. Yahoo Finance says Apple's PE is now 13. If we order the publicly traded companies by market cap, how far below Apple do we have to go to find the next company with a P/E of 13? I see that Exon's around 9.

Point being, there are already a lot of speculative dollars in AAPL. Sure, companies like Google and Amazon also have a lot of speculative dollars in them, I for one wouldn't touch them with a 10 foot pole. I still like AAPL, even if the P/E continues to decline as the E goes up.
post #37 of 214
Quote:
Originally Posted by tbell View Post

part of the problem is the stock market has long since drifted from a place to invest money. Investing means contributing money to a company to help it grow and to benefit from that "investment" if the company does in fact grow. Now, however, with the concept of short selling (and all the off shoots of that) the stock market has become nothing more than legalized gambling. You short the stock if you are gambling the stock will go down. Those who short the stock have a build in incentive to drive the price of a stock down. That is not investing. Further, it directly hurts businesses to have forces purposely rooting for its stock to go down, in turn, hurting real investors. What really stinks is those who short stocks are allowed to borrow the stocks of those who are so called investing of the stocks to work against the investors to try and drive the price down.

Moreover, this article nicely shows why the concept of investing is dead. If the markets were investment driven by any calculation apple's stock price would be significantly higher.

^^^^ this ^^^^
post #38 of 214
Apple will probably be around in 30 years, but it's an open question whether it is the next IBM or the next Zenith. There is absolutely no way to be sure. It is luck. The people in charge of Apple are human beings. None of them are Apple founders. Steve died. Apple's brass are business leaders exactly like every other business leader. They will emulate Steve's philosophy exactly like every other trendy company will attempt to do. Many of which are younger and hungrier -- more visionary -- than Apple.

-- Apple shareholder for >10 years. 25 year Mac user.
post #39 of 214
What I am about to say isn't new but its important to add...

The analysis of Apple's stock and valued perforance was, in this story, fantastic.

I would VERY much like to have the same author work equally as hard on analysing WHY Apple's stock is being "ignored".

Do some fear an Apple bubble? Or does Apple care at all? IF Apple continues to perform and out-perform as it has in the last 4 years, and IF their cash base continues to grow they could start buying back their shares, no? Then what?

I would like to know the WHY and HOW if this WHAT subject.

Thanks.
post #40 of 214
Quote:
Originally Posted by Snowdog65 View Post

Why does this stock booster article (by a company that owns stock) claim P/E of 8.25 on the front page when the actual P/E is 13? No self interest in making it look even more "undervalued"?

Microsoft isn't growing like Apple but they have still doubled earning over years ago, yet their stock is exactly where it was at half the earnings such that Microsoft's P/E is actually around 8.

The P/E of 13 is the current price to earnings ratio and the 8.25 P/E number is the forward-looking ratio. The stock price should move towards where earnings will be over the next few quarters, which is how most stock prices are valued.

As for Microsoft, their leadership sucks, have no direction and are squeezing every dollar from Windows and Office. Their sales will begin to slow if they have nothing new to offer in the future.
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You talkin' to me?
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