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No. of Recommendations: 9
At a P/E less than Microsoft, Google, Coca Cola, GE, or many other stalwarts.

True enough.

But, the issue I see with the common perception that Apple's stock is so cheap is that not only has the stock price run up in a dramatic fashion earnings have too. All well and good if earnings improve from here on, even if only modestly.

Earnings have risen so dramatically that based on 2010 per share earnings Apple's P/E is 32; based on 2011 earnings: a P/E of 17.5. And, at the current stock price taking the average earnings of the last five years the P/E is 23.

Although to the Apple faithful it's unthinkable that the company's earnings will evaporate as quickly as they materialized, It's the fear that they might contract at all that accounts for the pull-back in the stock price and uncertainty in spite of everything.

It's worth considering that because earnings have risen so far, so fast, that they could be vulnerable on this basis alone.

kelbon
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