SlothropsMonkey writes in the Motley Fool Post of the Day:
We’ve all heard that a million monkeys banging on a million typewriters will eventually reproduce the entire works of Shakespeare. Now, thanks to the Internet and the pontification about Apple’s latest earnings update, we know this is not true.
Speaking of true things, Monkey is now going to process Apple’s latest update nice and mumble-like to himself for nobody’s edification nor pleasure but his own, just to see how high he’s swinging from the branches and how hard he’ll hit his head when he slips, flips and falls.
So step by step…
Monkey is paying $506 dollars to own a business that last year paid him $40.32. Which means that for every 12.4 bananas Monkey invested, he gets an extra one “for free” to put into his tummy. Is this 12.4 ratio good? Hard tellin’ with nothing to compare it with. So look up the current S & P 500 P/E ratio and find that it is 18.88. That means that on average, you have to pay 18.88 bananas to eat an extra one. Which makes the price of one of Apple’s earning bananas approximately 34% cheaper than all the companies on the S& P on average. By this measure, Monkey feels like his investment in Apple’s bananas is wise.
Humbly recall there is also $157 per share in the piggy bank, effectively making Apple’s business in and of itself worth $380, which divided by last year’s $40.32 in earnings leads to a ratio of 9.42, or approximately 50% cheaper than the average of the S & P index.
Much more monkey goodness in the full article – very highly recommended – here.
[Thanks to MacDailyNews Reader “Brian” for the heads up.]