APPLE to be the Most VALUABLE Company in the world

[Rath]

famousringo said:

Rath said:
Apple are overvalued. They have without a doubt done very well for themselves but they rely on loyalty to a brand and that is something that usually doesn't last forever.

Actually, Apple is undervalued. Their price to earnings ratio keeps falling and falling, even while they maintain growth of 50-100% year after year.

http://tech.fortune.cnn.com/2011/08/09/apple-is-cheaper-at-353-21-than-it-was-at-78-20/

http://www.asymco.com/2011/07/25/apples-share-price-adjusted-for-earnings-and-growth-reaches-new-low/

Current P/E: about 14

Pre- iPhone P/E: about 30

The disparity gets worse if you exclude the value of Apple's cash pile.

Excuses are made about Steve Jobs' health and the threat of Android, but the real reason for the undervaluation is that Apple is growing so fast and making so much money that the market can't even believe it.

Apple doesn't match any of the other major companies in revenue, operating income, assets. It's P/E ratio isn't spectacular comparatively either.

http://ycharts.com/companies/AAPL/pe_ratio#zoom=10&compCos=MSFT,XOM

Apples in a bubble - it's price is high because investors are speculating that the price will go higher on the release of a new product. Once something happens that causes investors to lose confidence I reckon that the price will plummet down to a more reasonable value for it's assets and income.