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It’s trading at low multiples for the simple reason that it’s already the most valuable company in history and there are limits to how large a company can grow.
by empath75 8y ago
It’s trading at low multiples for the simple reason that it’s already the most valuable company in history and there are limits to how large a company can grow.
When you buy stock in companies with high multiples that’s because you’re dreaming that some day they’ll be as large as apple.
- snowwrestler 8y agoI find the "just because it's big" argument uncompelling because Amazon has only a slightly smaller valuation on a much higher multiple.
- Spooky23 8y agoAmazon’s objective is domination of all retail. Apple sells stuff with services. Apple is a better business in every dimension, but the Wall St types love the promise of Amazon.
- earenndil 8y ago> Apple is a better business in every dimension Depends on how you qualify 'better'. Amazon certainly has more room to expand.
- xapata 8y agoBecause Walmart shows how much retail dominance is possible. It's easy to imagine Amazon getting bigger.
- IBM 8y agoApple never had a high multiple at any point after 2009, when the most profitable product of all time was established and growing. This is the last 15 years of AAPL against it's P/E NTM https://i.imgur.com/zW6ORJK.png https://i.imgur.com/zW6ORJK.png
- GeekyBear 8y agoOne interesting analysis shows that if you bought Apple stock in 2009, Apple's earnings per share had equaled what you paid for that share of stock after only three years. http://www.asymco.com/2012/10/12/what-is-apples-realized-pe-ratio/ http://www.asymco.com/2012/10/12/what-is-apples-realized-pe-... Yet the stock's PE ratio was still remarkably low in that period, fluctuating in the 10 to 20 range.
- bradly 8y agoApple's PE ratio is the highest it has been in 10 years, and before that it still held a lower PE ratio than its competitors.