“Owning Apple right now can be frustrating to investors. The company’s fundamentals are intact but the stock ($561) is trading at 8.2x FY13 EPS ($53.88). Even analysts predict the company will earn more than they thought three weeks ago with earnings estimates increasing. Investors need to keep the course, and take these opportunities to buy Apple on these sell offs,” Darcy Travlos writes for Forbes.
“Investors are being offered an opportunity in the market to purchase a stock at 8.2x earnings (excluding cash) for a company that is growing 59% year-over-year in the last quarter,” Travlos writes. “This attractive stock price is the explanation for its recent run. Despite the stock price appreciation, the stock price has still not caught up with the value of this company. According to a FactSet report published this week, the forward PE of the S&P 500 is 12.7x. Apple’s is 8.2x. This means that Apple, one of the fastest growing large-capitalization companies with an arguably terrific line-up of products, is trading at a 50% discount to the overall market.”
Travlos writes, “The Apple story remains intact. Outstanding products. Limited competition. Outsized margins. Consistently high growth. Continued innovation. Enormous cash cushion. Stellar management and execution… Undoubtedly, there will come a time that Apple itself will be disrupted, but it does not appear to be anytime soon.”
Read more in the full article here.