I know, I say that the media is obsessed about Apple but I am sometimes guilty of the same thing. I thought it was shocking that Apple was worth more than the sum of Google, Facebook, Amazon and Microsoft as I wrote about yesterday. I can’t imagine choosing Apple if I was offered the choice between the two. That would not necessarily mean that I think Apple is overvalued though. Clearly, I think Facebook is undervalued and that Google is a great value play. I’m a bit more hesitant about both Microsoft and Amazon but also tend to like both stocks. So it’s certainly very possible that Apple might be a great bargain.Still Wouldn’t Be As Cheap As A Few Months Ago When I wrote about being crazy to not own Apple, it was December, and the stock price has increased 60% since then, Clearly, the stock was much more of a deal back then. Apple has had a good year and is scheduled to announce both the iPhone 5 and a mini iPad in the next few weeks which should lead to record sales in the upcoming weeks.

Is Apple Still A Bargain? The question is certainly intriguing and the best way for me to answer it is to look at earnings per share in recent quarters as well as what’s currently expected for company now led by Tim Cook.

Ticker	Name	Price	EPS	PE Ratio	PE Next Year	Return YTD	Sales Growth	Analyst rating	Book Value	Beta
AAPL	Apple Inc	674.8	28.05	15.86	12.75	67.55	65.96	4.65	119.23	0.99

It’s P/E ratio currently stands at 15.86 with a forward P/E of 12.75. Let’s compare those numbers with a few competitors in the hardware and software industry by also including 5 year growth in earnings per share and revenues:

Ticker	AAPL	MSFT	GOOG	EBAY
Name	Apple Inc	Microsoft Corp	Google Inc	eBay Inc
Sales Growth (1 year)	65.96	5.4	29.28	27.25
Sales Growth (5 year)	46.1	7.17	26.53	13.71
EPS growth (5 year)	61.33	N/A	23.79	27.37
P/E ratio	15.86	11.18	19.88	24.36
P/E Next Year	12.75	9.2	13.73	17.26

I’m more than open to add aother relevant companies to the comparison (there are no perfect fits obviously here). Personally, when I look at these numbers, I can’t help but think that Apple looks like a great value play, even at these numbers.

Can The Growth Keep Up? There’s no doubt, you could probably make a case that growth decelerate for Apple in the next few years. The company is so big that keeping up the growth seems impossible. It faces increased competition in its iPhone business from Android powered phones, it seems to be lacking leaderships since the early departue of Steve Jobs, etc.

On the other hand though, Apple is rumored to be a year or so away from launching an assault on TV’s which could be huge, it is a leader in two markets (smartphones and tablets) that are exploding, etc. The killer argument in my opinion is that even if things did slow down, Apple would still remain a value. I mean, look at its current P/E and companies that trade around that number and you’d have to agree that Apple’s stock floor isn’t very low in the short to medium term. Could it turn out to be the next RIMM? Sure, that’s possible, but it wouldn’t happen overnight. And I would certainly hope/expect to be able to spot that trend before the stock started tanking.

What are your thoughts? Is Apple still a great value at its current valuation?

What Worked in the Stock Market for Long-Term Investors?

Extensive research has found that the companies with predictable revenues and earnings outperform the market average; they also suffer lower probability of loss. As a matter of fact, this kind of companies are exactly what Warren Buffett wants to buy and hold forever. Please read the research about what worked in the stock market:

Part I: What worked in the market from 1998-2008? Part I: Predictability Rank
Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

More Gurufocus Links

Latest Guru Picks	Value Strategies
Warren Buffett Portfolio	Ben Graham Net-Net
Real Time Picks	Buffett-Munger Screener
Aggregated Portfolio	Undervalued Predictable
ETFs, Options	Low P/S Companies
Insider Trends	10-Year Financials
52-Week Lows	Interactive Charts
Model Portfolios	DCF Calculator
RSS Feed	Monthly Newsletters
The All-In-One Screener	Portfolio Tracking Tool