Post-Jobs run on overpriced Apple shares fails to occur
Markets more worried what'll happen to US gov, frankly
The departure of Steve Jobs as boss of Apple was expected to result in a mass sell-off of the overpriced vendor's shares this morning, but the news has been overshadowed by larger events.
Pre-market trading saw Apple shares pushed down more than 5 per cent.
But early trading on Nasdaq saw the shares fall just less than 2 per cent in a market which dipped 0.56 per cent.
Anyone owning a substantial amount of the $346bn company is likely waiting for an expected announcement from the US Federal Reserve boss Ben Bernanke which might, or might not, signal another round of quantitative easing.
The markets have been rising all week on this rumour although some suggest that printing yet more money is not the answer to long-term problems.
Either way the markets are waiting to hear what the Fed boss has got to say – more evidence that supposedly free markets are now entirely dependent on national governments.
Once Bernanke's press conference is over, investors' attention will return to the sovereign debt crisis slowly enveloping Europe. ®
I'm very curious to know where the author found Apple's share's overpriced, according to J.P. Morgan analyst Mark Moskowitz "Apple's stock valuation hasn't kept pace with the company's soaring revenue and earnings."
"Apple's per-share earnings are expected to rise 81% in the fiscal year ending in September on a 66% jump in revenue, according to analysts surveyed by Thomson Reuters. In contrast, Apple shares had risen 55% over the past year, before Thursday.
As a result, Apple's stock is now priced at 13.5 times future earnings, down from 16.7 at the beginning of the year, according to FactSet Research."
Still seems a good bargain to me.
actually, you're effectively wrong; AAPL is underpriced
P/E is based on past twelve months earnings. In order for earnings to remain flat 12 months ahead, they'd have to _shrink_to match their rapid growth over the past year. If Apple simply stopped growing, then P/E would drop to about 10 in a year's time. But it's going to carry on growing. So without a share price rise, P/E will be down at 8 or so in a year's time.
Thus Apple is underpriced now, based on fundamentals. But when did the market consider fundamentals? Compare and contrast AMZN: P/E 86, slower growth, and smaller margins than AAPL.
Lost its way?
Acorns grow into great Arms.