Should Apple Inc. be a $1,000, even $3,000, stock?

“Looking at how Apple (AAPL) has been trading lately, I’m amazed at how little Wall Street seems to value this stock – compared to say Amazon.com (AMZN),” Richard Bloch writes for Seeking Alpha.

“So what if Apple traded at Amazon’s multiple?” Bloch wonders.

“Based on earnings and operating income, Apple would be a $3,000 stock if it traded as richly as Amazon,” Bloch writes. “I’m not silly enough to suggest that Apple really should be a $3,000 stock, but perhaps $1,000? The stock once commanded a multiple of more than 30. If it ever does again, $1,000 would certainly be within reach.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]

29 Comments

    1. well… yes BUT that P/E ratio was a 2005 phenomenon that *correctly* anticipated 2010. The forces propelling Apple these days are different, including its size, something that contributed to the high P/E ratio and, when realized, resolved itself out of the math like a balloon popping.

      That’s what you wouldn’t see on a TOST analysis in 2005 unless you correct for PBAJ, and are clever enough to include data from both LATTE and CAKE curves.

  1. Rank Symbol Stock Name (Company) Price P/E
    1 BRK-A Berkshire Hathaway 120280.00 15.06
    2 GOOG Google Inc. 535.30 19.58
    3 PCLN priceline.com Inc 519.03 51.59
    4 ALX Alexander’s, Inc. 439.33 33.87
    5 WPO Washington Post Company 412.25 13.94
    6 MKL Markel Corporation 408.12 15.04
    7 WTM White Mountains Insurance 353.92 35.50
    8 ISRG Intuitive Surgical 348.38 34.91
    9 AAPL Apple Inc. 346.66 16.52
    10 Y Alleghany Corporation 333.87 15.06

    Someone needs to close the gap between Berkshire and Google.

    1. Appreciate your posting this list, but this is pretty old. If AAPL were still at a 16.52 multiple, it’d be about a $460 stock instead of ~$375.

      Its P/E multiple as of this post is 13.55, much lower than BRK.A (>16) and WPO (>20).

    2. “Someone needs to close the gap between Berkshire and Google.”

      Gap? Between the share prices? That doesn’t make any sense. This ranking doesn’t tell us anything. Literally nothing.

      The number of outstanding shares for each of these organizations (and all publicly traded companies) is totally arbitrary, so the actual dollar value of each share doesn’t tell you anything about the value of the company.

      Unless you were just posting this to be funny.
      In which case. Okay, fine.

      1. Okay sourpuss, whatever.

        I posted this to illustrate that stocks priced in the thousands is not unheard of, but chiefly to show how much B/H stock sells for.

        Now, if you want to get all technical and shit, go ahead, I don’t pretend to know anything about the stock market, or even what you said, blah blah blah, but it didn’t keep me from buying in to AAPL in 1997.

  2. “Based on earnings and operating income, Apple would be a $3,000 stock if it traded as richly as Amazon”

    CONCLUSION: DayTraderTard sheeple can’t taste the difference between thistles and sweet grass. They eat what they’re told. ‘Bah, BAHH!’ said the sheeple.

  3. Any company with reported financials, growth and stats like AAPL seems too good to be true so nobody believes it. AAPL must be somehow rotten at its core, or so goes the fear out there. It is ludicrous but few believe that such a large company can continue to grow so fast and keep growing.

    Every investor is motivated by greed and fear. Just look at the RIM failure that is happening. These investors are reassured by RIM’s failure that they must be fearful. There is no reason for the same kind of fear with AAPL but there is also no reason behind fear and greed.

    1. … “thinking” of many analysts. And the investors who listen to them. a) too good to be true and b) too expensive. I just bought another hundred shares – yeah, they are expensive! But, they will be more so in a few weeks, or months. And I’ll sell just before the next good news promises a drop in price. And then buy back after the drop.

    2. Yeah, you do wonder how much of the market’s undervaluation is due to disbelief, that it is too good to be true. That Apple buyers are cultists. That Apple is due for a macroeconomic implosion. That Apple is fudging its numbers like Enron. Etc., etc., etc.

  4. Apple needs to be prayed away from the hedge funds, who own the majority of it’s shares and play endless scare tactics to drop it’s price and apparent value so that they can load up endlessly and dump when it goes up, without decreasing their core controling quantities.

    Apple is without any doubt a $1000 stock and compared to google and amazon is by comparison to them, the only company that actually innovates, designs, manufactures and has real tangible assets and IP that feeds the entire tech industry.

    Apple is the only American company selling it’s popular high quality products like hot cakes, throughout the entire recession and economic downturn, breaking earnings and revenue records quarter after quarter for the past 8-10 years.

    The unsubstantiated negative press, lies and FUD scare tactics relating to Apple, which keep perpetuating fear and greed and rob honest private investors of their true deserved return are the same tactics that Cheney, Rove & Co. perpetuated on the American public for 8 years, that bankrupted and robbed the coffers of this great country. The lies worked then and obviusly still work now to fool naive and stupid people who can’t see the obvious truth and proof of greatness.

    Over 70% of Apple shares are owned by the same institutions and likes, that have ripped off the people and created the worst economic crisis of all times worldwide. If private investors stood by the evidence and proof that Apple is vaue and didn’t play into the scare tactics by panic selling Apple would realize it’s true value and moderate $ 1000 price.

    Occupy the SEC and hedge funds – bring them down and take away their unfair advantage.

  5. Wall Street does value Apple. It’s their favorite yo-yo. It allows the short sellers to steal from real investors and manipulate the Market. A Bear attack on Apple is the very best way to move the market down The high PPS allows a big dollar move down with a modest amount of naked shorting. A $5.00 down move will knock out the stops many people carry, and that continues the slide. This is the way we went from $425 to $375 in 3 weeks. Real apple investors will provide the funds to get those Hedge Funds back in the black for the year!

  6. “The stock once commanded a multiple of more than 30. If it ever does again, $1,000 would certainly be within reach.”

    Or wait 3 years and earnings growth will get us there despite the P/E of 10.

  7. Stocks, like houses, are only worth what people are willing to pay. Once you reach a certain level psychological factors kick in, whether they’re grounded in reality or not.

  8. Dont fight the market. If it wants AAPL to go down then down it goes. Some is due to hedge funds and mutual funds selling large blocks of shares. Then there’s always the old manipulation angle. But fear not fanboys, it happens to many stocks so it’s not that the world hates AAPL. It’s just business. There is speculation about sales of iPads and parts constraints but who knows the real truth? Certainly not anyone on this board. It’s been a rough couple of months and I’d certainly like to see AAPL ramp up before Christmas but this could be an opportunity to pick up shares or options? Or you might have cheaper prices soon? The company is just fine. The stock? Maybe not.

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