Everyone is talking about how cheap Apple’s earnings multiple is. So I wanted to compare that hard-to-believe number to some of the cheapest valued companies based on their simple P/E ratio.
I started by looking at the DOW stocks. I will eliminate JPM with the cheapest multiple of 8.5 because I don’t believe any bank earnings as they are all made up.
Then I looked at every other stock and guess what I found? Only two stocks have single digit P/E ratios. That’s right, the DOW, filled with “industrial” stocks, has only 2 “cheap” stocks based on their P/E multiple.
The first is Hewlett Packard (HPQ) with an 8x multiple. This is the stock that has done everything wrong in the past year and lost half its market value. It is truly hated and rightfully so. The second is Chevron (CVX), also with an 8x multiple. But CVX has a $210B market value and a 3% yield.
Every other stock in the DOW trades at a double digit multiple of earnings. Is that “cheap”? Historically, nope…
BTW–Apple’s market value of nearly $500 billion is equal to roughly 17% of the value of the 30 Dow stocks combined of roughly $3 trillion.
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I miss your posts from 2010 about stocks like QCOM and WDC.
You mean when I posted my pretty charts with buy, stop and target levels?
thanks scott, i see it as an election year rally. roads r being bilt, people r buying cars. i wonder if this administration was draging there heals to ramp up gdp this year so obama gets elected again. im mostly in nat gas plays. clne wprt lng…
COP at 8x, yielding 3.70%.
Just sayin’….
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Scott, I have been looking at your rants on Twitter for years now. Do you really think the market is going up because of some hand. Come on man, you better than that and no… AAPL wont go down because you shorted it. It will go down when there are more sellers than buyers, there are Kids who read your blog and follow you on Twitter. Do them a service and speak the truth not some lies. By the way you discouraged people buying AAPL 200 points ago.
Truth? You can’t handle the truth…
You go guy.
It must be cheap because all of the putzes and yutzes on CNBC are telling us it is cheap. Now go home- or in your case, stay home, and give your kids a hug.
LOL, Gary Kaltbaum reads ibankcoin … stocks, unemployment, jobs the economy scam and shams and whatever else comes to mind 🙂