It’s no secret, I’ve been a huge believer in Apple, both the company and its stock. As you can imagine the stock getting crushed has not been good for me. Not only am I long the stock but it was also one of my 4 stock picks in the yearly stock picking competition. As you can imagine, my performance has declined. Just take a look at this chart:
Brutal, brutal, brutal….
Let’s Not Lose The Context
It becomes so easy with the information overload to think that Apple is in big trouble, crashing quickly, etc. Let’s look at a longer term chart
Suddenly, it doesn’t look as bad does it? Just last week, Apple declined after UBS downgraded Apple, changing its price target to $700 (from $780). More is expected today after a downgrade by Citi during the weekend. That’s still pretty darn high isn’t it? It would be a return of over 25% in the next year.
Is Apple Still A Bargain?
Let’s take a look at some numbers:| Ticker | Name | Price | EPS | PE Ratio | PE Next Year | Return YTD | Sales Growth | Analyst rating | Book Value | Beta |
|---|---|---|---|---|---|---|---|---|---|---|
| AAPL | Apple Inc | 509.794 | 44.64 | 11.99 | 9.09 | 31.97 | 44.58 | 4.63 | 125.86 | 1.01 |
To give you an idea, that is almost exactly Microsoft’s (MSFT) P/E ratio..except that Microsoft is growing 8 to 9 times more slowly…
So really, I continue to believe in Apple’s growth story, and its in stock.. how about you?
Disclaimer: Long Apple (AAPL, Financial)
