The following is an excerpt from Rick Aristotle Munarriz | April 6, 2012 | DailyFinance.com |
After a monstrously good first quarter — during which the S&P 500 climbed 12%, only to be outdone by Nasdaq’s 19% spurt — what did we learn?
Every bullish run or bearish retreat offers a great opportunity to learn something about the market and the publicly traded companies that make it happen.
Let’s go over a few of the morsels that Mr. Market has served up for those paying attention.
1. You can be big and still be nimble. Apple (AAPL) became just the sixth company in this country to cross the $500 billion mark in market capitalization earlier this year, and some investors began to worry. Every other company that hit that mark went on to peak shortly thereafter, and they are all worth less than $500 billion today.
Why should Apple be any different? Well, for starters, it’s still surprisingly cheap on an earnings basis. The iPhone, iPad, and Mac daddy is trading for just 14 times this year’s projected profitability. Many of the companies that were temporarily marked up to $500 billion were fetching unsustainable multiples during the dot-com bubble.
Apple is also still growing quickly despite its gargantuan size. The $46.3 billion in net revenue that the tech star rang up in its latest quarter was 73% ahead of what it served up during the prior year’s holiday quarter.
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