3 ms·

I like how 18x P/E is low nowadays!

• hcnews 9y ago
  This is because some of the successful businesses have learnt to build on their existing success. This is an evolution of previous generation of successful companies which mainly relied on working on one main idea. Now its become easier to built up on the infrastructure provided by previous generation's success. Or atleast that's what my current thought is regarding this topic.
  • opportune 9y ago
    It's really shuffling money from earnings into expanding an existing company is tax-advantaged. Let's say I own 100% of ACME, which made a $100 profit last year. Rather than receive that money as dividends and then reinvest it, which causes the money to be taxed now and for it to possibly be taxed at a higher rate than capital gains, I reinvest that money into ACME. This has the effect of deferring taxation on that profit and allows it to be taxed at the same rate as capital gains at a later date
• xkjkls 9y ago
  Price to Earnings less cash is probably a better metric anyways. If you take away the ~250 billion in cash that Apple has on their balance sheet, you end up with a P/E of around 12-13, which is a little below average historically.