With its stock at an all-time high, you might think Apple was over-valued.
My headline is borrowed, once again, from venture capitalist Marc Andreessen, who tweeted the phrase nearly two years ago, accompanied by a chart labeled “Reality Distorted.”
I’ve adapted and updated his chart to reflect today’s PE ratios and added a second factor: Operating cash flow.
[E-mail readers getting an error message, click here for the interactive chart.]
[To get the full effect, click the column headings.]
Reality is no less distorted than it was two years ago. Apple is still hauling in more billions, and (relative to its peers) getting the least respect.
Below: Trailing price-to-earnings ratios over that time.
Click to enlarge.
My take: Wall Street still sees Apple as a hit-based company that will never have another hit. History suggests it’s more like Pixar, which only releases hits.
Interesting, I thought the quote came from Horace Dediu.
So did I.
I would like to thank the “smart money” on Wall Street, analysts from FUDD central, lying brokerage firms and the complicit media in allowing me to assemble a very large Apple holding at dirt cheap prices and yes 177-179 is still dirt cheap. Although my average cost is 100 points less, I still buy more Apple at every opportunity.
Apple can be bought at will and held. By the end of FY 2018 second quarter, we will cross under 5 billion shares outstanding. One day there will be billions fewer shares and those that put their money up and held position, will laugh last.
A cautionary note this morning from the WSJ, “Forget fundamentals, momentum is back…”
https://www.wsj.com/articles/the-momentum-game-has-returned-to-the-stock-market-1516058256