“The P/E is fluctuating on either side of 20 but when considering trailing growth, comparable companies, the macroeconomic conditions and guidance the value of the company is reaching new lows,” Dediu reports. “Earnings were 75% higher in 2010 than the year before. So based on the growth, the rule-of-thumb ratio P/E/training Growth (P/E/tG) is 0.24. This ratio (where 1.0 is seen as ‘fair value’) is the lowest since July 2009, during the first months of recession recovery.”
Dediu reports, “Given the new low in valuation contrasted with optimism on behalf of many (including management), on some forums there is discussion about Apple becoming the target for a take-over. There is some perverse merit to this logic. With $64 in cash, $25/yr in earnings and 75% growth it’s so cheap that if credit were available, it would make a tempting candidate.”
Read more in the full article here.
LOL
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“If credit were available” being the key phrase.
Apple is worth too much for any company to take over. Maybe the government of China, but no publicly held company. That $64B in cash is tempting hedge fund types.
I do not understand…who could afford to buy the company?
The readers here should be able to vote on whether the site has to remove a story. This is so ridiculous I almost want to kill myself for clicking the link.
HaHaHaHah! Another sheer idiocy babble. So many morons …
Yes, $64 billion in cash will surely have the eye of many a corporate raider.
That said, there simply isn’t enough credit in the world to buy a company so large. If there were ExxonMobil would’ve been taken private years ago.
Lots of luck finding some one with a spare $330B to lend you.
What a stupid story and a moron that wrote it. (Not moron in educational sense, just moron in logical sense). Steve Jobs is not about to let anybody buy his baby. If “credit were available” and someone tried to buy the worlds most valuable technology company (again, you would need LOTS of credit), then I am sure Apple would just use it’s cash hoard and any credit they could get to first purchase the company that is trying to purchase it.
If Exxon wanted it…I guess?
give me that $350bn credit and i will be the first to buy!
I think he is only justifying that Apple stock is cheap, Don’t you think?
@TimD
To buy you need additional 10-20% premium, which brings the value up to $396B !!
Hey, good idea! Let’s say MDN and its readers pool our money and buy it!
By who the WTO?
Gimmie a break…
You would only need a controlling stock percentage ie 51%. However that is still a lot of cash. Plus to buy that stock from individual holders would take a long time and drive the price up as well.
Dumb piece written to generate web hits. Job done as far as the writer is concerned.
Is it just me or the collective IQ has dropped below the thermometer in this forum? At least, until ken1w or KenC decides to pitch in.
Guys who are calling the writer moron should do well to note, he’s not saying that Apple is actually up for sale, rather it’s an excellent buy proposition (that would have made more sense in pre-bubble days), and that Apple is actually under valued and under appreciated at the market. In other words, the stock at this PE is a screaming steal. It also makes a strong case that under a capable hand that cash in hand can be used to pay off the debt (to acquire the company), implying doubly so how strong the company is, which has caught the blindsided Street look dumb in the headlight.
Finally, there maybe is a line between the line, the cash pile for Apple, therefore, is now a strong reason why strategic acquisition is off the table for this company. Apple’s cash hording, thereby, seems not only reasonable, but a necessity.
all readers of this site could do worse than read Horace Dediu’s site once in a while. One of the best analysts of the electronic space and digs deeper than most. Asymco.com is one of my favorites for Apple analysis.
thanks for listening. now you can go back to frothing and wetting yourselves, if that’s your thing.
@Macromancer : exactly! BUT—where is the pithy macdailynews take? ? where is the ThinkBeforeYouClick ™? comeon MDN guys!!
The story headline has a question mark. That means the story has a question.
If you don’t like the story, write a better one.
@Buster, exactly.
Besides, Apple would not function well after a hostile takeover. A successful buyout would depend on the cooperation of senior management.
You guys get that Dediu is
1) The most accurate (blogger) analyst out there
2) Is kinda bullish about Apple
3) Is sort of saying this with tongue somewhat firmly planted in cheek
Dediu’s larger point is that Apple is:
UNDERVALUED
by the market to an almost absurd level!
@krquet
Bingo!!!
Just buy! Idiots……