“Just like most major indices, Apple is now flat year to date,” Sean Chandler writes for Seeking Alpha. “Since October, Apple has lost 30% of its value equal to roughly $300 billion.”
“That’s more than 75% of Facebook’s valuation and is more than the total value of corporate giants like Visa, Verizon, or even Walmart,” Chandler writes. “Yes, Apple has lost more value in two months than the world’s largest employer has accumulated in a half century.”
“With a market cap of over a trillion dollars, some speculate that Apple was a bubble, but it wasn’t. At its 52-week high, Apple’s trailing 12-month P/E ratio was 20,” Chandler writes. “After posting a record earnings report and falling over 20%, its P/E is now 14.1; that’s four times less than Walmart. When you factor in Apple’s net cash of $129B ($244B in cash, $115 in debt), its P/E ratio is less than 12.”
“Very little has changed at Apple. Its products are industry-leading, its more profitable than ever before, and its most recent earnings report was a record quarter. In spite of that, general market and iPhone fears have likely caused one of Apple’s sharpest declines in its history. Historically, this is an incredibly rare buying opportunity,” Chandler writes. “At $160 per share, Apple’s price-to-earnings ratio would be less than 11 when you take into account net cash. At its current levels, I find Apple to be pretty cheap, and if by chance, it does hit $160, I’m ready to load the boat.”
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MacDailyNews Take: Look at the P/E ratio, cash on hand, Apple’s guidance, the services business, etc. and it’s tough not to see an historic buying opportunity.