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.
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.
https://www.wsj.com/articles/the-momentum-game-has-returned-to-the-stock-market-1516058256