The low PE is based on past earnings. The earnings going forward are not guaranteed and are highly speculative for any tech company but especially for apple since all their current products will be obsolete within two years time. That is why the PE is so low. Its guaranteed that people will still be buying soft drinks and toothpaste in 5 years but no one has any idea what products will be sold by Apple and what margins their products will have.
Apple's current products should not be obsolete in 5 years. It is fair to say that unless the Iphone is improved that one could see a slowing in sales growth. One must also consider that there is a huge untapped market in China and India for a lower priced (modified) version which, if tapped would provide a new stimulus for the share price
There is no reasonable explanation for Apple stock price. Even at $705, Apple by financial valuation would be cheap. But at $430 and probably still dropping to what $400? Amazing. Apple is going lower. Amazing. Apple cheap at $705 is what at $400? And who knows Apple may go down into the $300s .. $390s, .. $380s. Apple is just dropping .. Amazing just Amazing.
Really? so high sugar soft drinks are a sure bet in 5 yrs? the decline curve now on consumption of them is steep----check it out-----burn all your valuation book, if Apple can't have a 12-14PE, there's no rational for anyone valuing an asset based on a Ben Graham model, Apple should be at 1200 based on his model---or more---market does not see Apples "parts" and does not understand its revenue model from carriers---plus it messed up on the last qtr due to the calender and model change in way Apple will report estimates---