It's amazing to be writing about Google and Apple as value plays but the reality is that both are selling pretty inexpensive relative to earnings power.. Google currently sits at 19.30 P/E, one of the lowest P/E even during the 2009 market collapse it was in the 20's. Here is a chart showing Googles growth in the last few years from Nasdaq.com
If Google continues this growth let's say for just 5 more years the stock would sell at an equivalent of a stock under 10 P/E. This is what makes it a value play.. Currently Google is valued at 3.46 x Book Value and 4.38 x Tangible book value.. Definitely not a Benjamin Graham book value play but more of a legendary Peter Lynch growth company play.
Here is a little info on Apple inc. Apple currently trades at 18.52 P/E, not one of the lowest P/E in Apple history but Apple has been trading in this range for a few years now. Here is a chart showing Apple's growth in the last few years from Nasdaq.com
Wow pretty impressive growth right?? Apple without a doubt has been delivering great growth and if it continued at this growth for 5 more years it would trade for an equivalent of 6 P/E. This is what makes it a value play and the fact that I think Apple has reached a tipping point. More and more people are now going to macs and are abandoning windows, not a good thing for Microsoft, but a great thing for Apple. Currently Apple is valued at 5.52 x book value and 5.65 x tangible book value.. Again definitely not a Benjamin Graham book value and even Peter Lynch would say this company is growing too fast and its growth is unattainable growth for the future..
In the end if I had to choose one of these I believe I would choose Google. More companies are working with Google to produce products and it seems like google survives whether the next hit phone is an Iphone or a windows 9 phone; not the same story for Apple. Right now everyone is gunning for Apple, like a champion fighter the more people know about you the better the chance of exploiting your weaknesses and what happens if the Apple fad dies when Steve goes?
Just a quick thought from the mind of an insomniac.
| Year | Sales | Net Income | EPS |
| 12/2006 | 10,604.92 | 3,077.45 | 9.94 |
| 12/2007 | 16,593.99 | 4,203.72 | 13.29 |
| 12/2008 | 21,795.55 | 4,226.86 | 13.31 |
| 12/2009 | 23,651.00 | 6,520.00 | 20.41 |
| 12/2010 | 29,321.00 | 8,505.00 | 26.31 |
| Growth Rates | 28.95 | 28.94 | 27.55 |
If Google continues this growth let's say for just 5 more years the stock would sell at an equivalent of a stock under 10 P/E. This is what makes it a value play.. Currently Google is valued at 3.46 x Book Value and 4.38 x Tangible book value.. Definitely not a Benjamin Graham book value play but more of a legendary Peter Lynch growth company play.
Here is a little info on Apple inc. Apple currently trades at 18.52 P/E, not one of the lowest P/E in Apple history but Apple has been trading in this range for a few years now. Here is a chart showing Apple's growth in the last few years from Nasdaq.com
| Year | Sales | Net Income | EPS |
| 09/2006 | 19,315.00 | 1,989.00 | 2.27 |
| 09/2007 | 24,006.00 | 3,496.00 | 3.93 |
| 09/2008 | 32,479.00 | 4,834.00 | 5.36 |
| 09/2009 | 42,905.00 | 8,235.00 | 6.29 |
| 09/2010 | 65,225.00 | 14,013.00 | 15.15 |
| Growth Rates | 35.56 | 62.92 | 60.73 |
Wow pretty impressive growth right?? Apple without a doubt has been delivering great growth and if it continued at this growth for 5 more years it would trade for an equivalent of 6 P/E. This is what makes it a value play and the fact that I think Apple has reached a tipping point. More and more people are now going to macs and are abandoning windows, not a good thing for Microsoft, but a great thing for Apple. Currently Apple is valued at 5.52 x book value and 5.65 x tangible book value.. Again definitely not a Benjamin Graham book value and even Peter Lynch would say this company is growing too fast and its growth is unattainable growth for the future..
In the end if I had to choose one of these I believe I would choose Google. More companies are working with Google to produce products and it seems like google survives whether the next hit phone is an Iphone or a windows 9 phone; not the same story for Apple. Right now everyone is gunning for Apple, like a champion fighter the more people know about you the better the chance of exploiting your weaknesses and what happens if the Apple fad dies when Steve goes?
Just a quick thought from the mind of an insomniac.
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