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It's certainly low relative to any reasonable comp. Whether it's low in absolute terms is pretty subjective (but if you think 18 is expensive for a company with
by yeldarb 9y ago
It's certainly low relative to any reasonable comp. Whether it's low in absolute terms is pretty subjective (but if you think 18 is expensive for a company with double digit growth, 280B in cash, and a 1.5% yield, I'm curious what's left out there to buy).
P/E right now is 23.3 for the S&P, 27.8 for the Nasdaq, and 27.7 for the Dow.
- perl4ever 9y agoI'm not sure that it makes sense to pay proportionately more for a company with more cash. Whatever return Apple produces on its investments in making iPhones and such, cash tends to reduce that. So it seems logical that it would be valued more conservatively than a company that holds less cash. I also think that it is reasonable to consider that the whole market might be overvalued, given that nobody can predict the future and we are at historic lows with regard to interest rates. So it isn't outrageous to consider a historical average P/E for reference, rather than the average P/E right now.