The stock market closed higher on Monday despite weak economic data from China, where interest rates were cut unexpectedly.
Overall, S&P500 increased 0.40% to 4,297, while NASDAQ was up 0.6% to 13,128.
In the meantime, Apple (AAPL) was a sensation during the past decade. A lot of the growth came from the P/E rising.
Tweet of the Day
Aweeeee sookie sookie now now:
Greater than 90% of $SPX stocks are trading above their 50-DMA as of today.
Since 2003 n= 14 (including 2022)
Avg. 12-month returns = ~18%
Positivity rate = 94%$SPY $VIX $QQQ pic.twitter.com/jZtfQvYvAH— Seth Golden (@SethCL) August 12, 2022
Chart of the Day
Our chart of the day is AAPL’s one-year chart, done on May 1, 2013.
Note that the stock was in a huge correction. But notice that profits (EPS) went from $2 to $44 in just six years. This stock was a long term leader.
With a P/E of only 10, this stock was also a bargain.
After splits, investors who bought in at that time and held would now have a cost basis of $16 on the stock. Apple closed at $173 today.
AAPL is part of the Conservative Growth Portfolio. The company was incredibly undervalued a decade ago. The stock’s median P/E was 12 to 13 during fiscal years 2011-2016, and then it was 16-17 during 2017-2019. In 2020, the median P/E jumped to 29. Looking ahead, I feel this stock is worthy of a 25 P/E, which equates to $154 this qtr.
