“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.”
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