US: Is Apple expensive?
In 2014, 169.22M of Iphone was sold as compared to 150.25M in 2013, a 12.6% increase, according to the global Apple Iphone sales. Note that Apple (NASDAQ: AAPL) has a financial year ends 27 Sep, such that the sales of Iphone from Oct-Dec 2013 will be reflected in Q1 2014. In fact, the sales is breaking record quarter-to-quarter if compared with the preceding year. I was terribly wrong about the trend.
So I observe the way how Apple fans stick to Apple products: the joy and excitement of having it, the honour of using it, the sense of playing with it and the pride of owning Apple products. Last year, Iphone 6/6+ was released. While the most prominent difference with previous releases is a larger screen, which has no surprise, this time I stand on a view that Iphone 6 will create a record sales as well.
On 27 Jan, AAPL released its latest financial quarter report. 74.5M of Iphone sold in Q1 2015 as compared to 51M in Q1 2014. This is an incredible result. A record EPS of 3.06 with record profit. 2014 full year EPS of $7.36, with a current price of $117.16, this is equivalent to a PE of 15.9.
Now, the question is, is AAPL expensive? Let's look at some technology stocks:
Name Stock Code PE
Google GOOL 28.1
Facebook FB 69.13
Avago AVGO 104.13
Amazon AMZN Negative EPS, Stock price stood at $354.53!
You can see how "insane" is US market. A stock trading at PE 100 is not unusual. Is AAPL really expensive at a price of $117.16? Of course, I am not suggesting to buy with expectation of AAPL to reach a PE of 100, but if you are confident that AAPL will still grow, then it may look attractive at the current price.
In 2012, my lecturer once said something wise:
20 years ago you can eat apple. But can you eat Apple now?
20 years ago, nobody will ever think that Apple is inedible. Nowadays, when the very same noun is being mentioned, how often it means Apple, and how often will people will think of apple? The answer is obvious, isn't it?
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