Is Apple the best buy in tech?

“Investors used to paying big for Apple (AAPL) are now finding the company at surprisingly reasonable multiples,” The Motley Fool writes.

“In the video below, technology analyst Eric Bleeker looks at valuing Apple using an enterprise-value-to-free-cash-flow ratio. While that might sound complex, it’s basically a way to separate out a company’s cash from its value, and then divide that by the amount of cash its business has generated across the past year,” TMF writes. “The lower the multiple, the ‘cheaper’ a company is. Using this ratio, we find just how cheap Apple has become compared to some of its big tech peers.”

TMF writes, “Eric discusses whether investors are underestimating the “stickiness” of Apple’s platform at these prices and compares the company’s valuation relative to other smartphone plays. In the end, he says whether or not you believe Apple is now cheap comes down to your feeling on whether it’s a software company with highly locked-in users, or a hardware company facing a decline from peak margins and uncertain future growth.”

Read more in the full article here.

15 Comments

  1. Apple’s day in the sun is over. I’ve been a diehard Apple fan, product owner, stock owner and evangelist but, I will admit that this last go-round with new cell phone purchase I jumped ship and got an Android based phone. I still don’t intend to abandon my Macs. We also went with a Kindle fire HD for my wife for Christmas. They create great products that start a new genre of products then others eventually copy, improve and overtake them or at least get as good for less money.

  2. “As Apple flirts with new lows, investors are overlooking the fact that it just posted all-time records in three of its most important metrics: total revenue, iPhone units, and iPad units.

    Meanwhile, its cash balance has swelled to an incredible $137.1 billion, representing 32% of its market cap. Its P/E now sits at 10.4, and backing out the $146 per share in cash brings that figure down to 7.”

    Great breakdown of issues and hope:

    http://www.fool.com/investing/general/2013/01/24/apple-earnings-plunge-are-you-panicking-yet.aspx

    1. It’s not as if I’m overlooking the fact they made billions of dollars in profit. I’m just pissed I’m losing great amounts of money DESPITE the fact they made billions in profit. The fact that I can’t put in my pocket any of the money Apple made after I lent it my money to use doubly pisses me off. Look, I realize Apple is running a good company as far as successful companies go, but I still want to see some money returning to me.

      I know it’s the way Wall Street is being run and Apple has very little control over that but I’ve earned the right to be angry if I feel I’m getting stiffed. It’s my fault for sticking with Apple based on fundamentals and I was stupid for thinking Apple might get somewhat of a fair shake and I didn’t shift any of my earnings to Netflix. However, I’m staying with Apple for the duration. I like Apple products and I believe in the company. I just didn’t realize being a long-term owner of stock of a financially successful company would incur such huge losses while the company is still making plenty of money.

      A properly-running company constantly falling in value while it’s still making plenty of money doesn’t make any sense to me. I really never envisioned that scenario. I’ve never owned an investment like that. Successful companies usually make money for investors, not lose it.

      1. As an investor, you should bind yourself to the rule of buy low and sell high. Apple’s fundamentals prove that they’re not going out of business anytime soon. Anyone selling their shares now are paranoid sheep, meanwhile the real investors are grinning while they rake in more shares. You can’t just sell whenever you want and make money. Diversify your stocks so you can sell others that are doing well while Apple’s licking its wounds.

      2. A properly-running company constantly falling in value while it’s still making plenty of money doesn’t make any sense to me.

        Nor should it!

        So what is Apple supposed to do in order to please the pack of howling BABOONS on Wall Street? Turn themselves into yet-another worthless, dumbass biznizz like everyone else? I don’t think so.

        Meanwhile, did you miss the part where Apple is paying a DIVIDEND in February?

        As for Apple hoarding cash: I would too with a bunch of losers abusing AAPL while Apple does nothing but thrive. When gangs of people outright HATE YOU and F*CK with your stock price, OF COURSE you’re going to hoard cash in order to survive whatever catastrophic mess the loonies contrive against you. I LOVE IT that Apple are going to continue to survive AND remain the best tech company on the planet DESPITE the Idiocracy ‘Apple Bear’ routine going on right now. Good for you Apple! Stick through it, ‘bare’ with it and kick them all in the balls with your beautiful creations that put EVERY other company to shame.

        What’s that kewl phrase about revenge? Oh yeah:
        SUCCESS IS THE BEST REVENGE!

        1. Keep Hoarding the cash! Don’t bend to Wallstreet talking baboons!

          Don’t buy AAPL stock options. Just buy AAPL stock even if it’s only a few shares

      3. “The fact that I can’t put in my pocket any of the money Apple made after I lent it my money to use doubly pisses me off.”

        That $700 you paid for a share of AAPL back in Sept wasn’t a loan to Apple. It went into my pocket. 🙂

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