“Few stocks are as confounding as Apple,” Daren Fonda writes for Kiplinger. “The world’s most valuable company—worth $521.7 billion—is hauling in some $50 billion in revenues every three months. It sits on $216 billion in cash and securities. And it earned a record $18.4 billion in the three-month period that ended December 26, 2015. No other company comes close to numbers that titanic.”
“Apple predicts an 11% year-over-year decline in revenues for the three-month period ending this March — its first quarterly sales slide in 13 years… this has weighed heavily on Apple’s stock,” Fonda writes. “On January 27, the day after Apple released its latest earnings report, the stock fell 6.6%. All told, the shares have fallen 29% since they closed at $133 on February 23, 2015.”
“Does the pullback make the stock worth buying?” Fonda writes. “Based on traditional valuation measures, shares do look cheap, trading at a bit more than 10 times estimated earnings for calendar year 2016. That’s about one-third less than the price-earnings ratio of 15 for the S&P 500. Apple also looks like a bargain compared with other tech firms. Google’s parent company, Alphabet (GOOGL, $748.30), trades at 22 times estimated 2016 earnings. Facebook (FB, $109.11) clocks in with a P/E of 38… Hhistory suggests this may be a buying opportunity.”
Read more in the full article here.
MacDailyNews Take: You had us at “confounding.”
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Apple, Alphabet, and a rigged stock market – February 1, 2016
Alphabet Inc. is close to snatching Apple’s crown as the world’s most valuable company – February 1, 2016
Whoever didn’t load up on more shares at these fore sale prices is hoplessly a loser.
Or a hopelss loser…
There is no rush to buy until we are past the next quarter, which will be bad no matter what
Sure stupid, like the stock will wait for you till then…
Apple’s is in big debt. Unnecessarily. This speaks to management. Perhaps some have lost faith.
Re: Silly auto-fan-boi downgrades to BOB comment….It’s not to say Apple has gone the way of a mindless spender, but the debt (60B) is a marked difference from Apple’s $$ historical debt holding (at lease Jobs-Round II) and, therefore a reasonable cause for pause? For those that can speak on the matter, please do–I’m curious.
The debt is still less than their cash on hand. So they have debt but they aren’t in a deficit situation.
This is actually better for the shareholder because paying interest on the debt is cheaper than the taxes it would pay on bringing their cash back to the US to do their share buybacks.
and as a bonus, it will be cheaper than the dividends that would be payed to the shareholders over time…. just sayin’
Apple sells luxury products. Are they worth the price? For the most part I would say yes. However, what’s been the outlook for the economy the last 8 years? Most think we’re right on the edge of another 2008 or worse. What’s the first thing people cut out when money is tight? Expensive items like the products Apple sells. Maybe the projected outlook for the economy on the whole is affecting Apple’s stock.
Check Apple’s sales past performance during recessions. It is very interesting. Revealing.
Duh?!?!
great article