One of these stocks is not like the others (hint: Apple)

Nine charts, with commentary, by friend-of-the-blog Jeff F:

Jeff F nine chartsClick to enlarge.

Jeff's observations:

  • Institutional ownership of AAPL continues to lag. I believe this is factor explaining the higher P/E ratios of the others, excluding AMZN (institutions are likely wary that its valuation has gotten ahead of itself).
  • Five Year EPS Growth rates need to be updated by Wall Street for Apple’s expected large share buyback on the order of $100- $150B. Tax rates will also boost these growth metrics, but that’s a relative issue, as all companies are impacted. Not incidentally, Apple is scheduled to report a 30% YOY increase in net income for the March 2018 quarter.
  • Even assuming Wall Street growth rates are correct, it’s hard to see how they explain the P/E ratios assigned to AMZN, GOOG and MSFT, and the resulting share prices.
  • Given Apple’s stated commitment of getting to cash neutral, Apple is going to have to purchase far more shares than what WS is currently anticipated to announce on May 1 ($100B). Although I did not chart it here, Apple’s cash is still king, reporting the highest amount of cash as a % of share price in the group.

My take: Apple still trades like a steel mill going out of business.

6 Comments

  1. Robert Paul Leitao said:
    Nice work, Jeff!

    It appears Apple’s projected EPS growth rate does not fully reflect the company’s cash neutral plan and the company’s organic growth rates are discounted.

    1
    April 27, 2018

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