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What’s It Really Worth? Why Is Apple’s Stock Negative For The Year

April 22, 2011 | Posted in News

Earlier today, Apple stock dipped into negative territory for the year. One reason for this drop is the very real possibility that Apple won't release its next iPhone until the fall, if not next year.

What's going on with Apple and the iPhone 5? The SAIcast discuss.

Bonus: How much would you pay for a 42" Apple TV? Dan Frommer says he "would spend a lot of money" on one.

AAPL is set to jump about $11 per share at the open this morning, which would take the stock to $354 per share.
In respect to the prospects for Apple and its shares, here is what some folks are saying.
It is also interesting to consider this:

Company Price to Earnings Ratio Market Value
XOM - Exxon Mobil 13.76 $424 Billion
AAPL 19.8 $328 Billion
GE 17.7 $217 Billion
MT - Arcelor Mittal Steel 19.5 $56 Billion

AAPL price-to-earnings ratio (PE) is on the high range of the PE multiples above. Also, Apples Market Cap makes it the worlds second largest company, based on Market Capitalization. The largest is ExxonMobil.

In today’s Wall Street Journal, it was pointed out that AAPL has approximately $66 billion in cash and short term investments on its balance sheet. When the market cap is reduced by this cash pile, the result is a share price for the company of about $283 per share. The resulting PE of these shares is about 15.7.

But this also puts the value of the cash portion of the share price at about $71 per share ($66 billion cash divided by 921 million shares outstanding). But that portion of the shares has no current earnings, so for now it is a dead asset, with the future potential to acquire earnings or be returned to shareholders. But this cash, since it is held in dollars also has the potential to depreciate, as the dollar continues to fall relative to other world market currencies.

Clearly the momentum in earnings and product releases for AAPL is there. For now, this is what the market is pricing into the stock.

Hopefully this momentum will continue.

Taged in: apple, negative, really, stock, worth