Giuseppe Taibi’s Techlog

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As many know I have been a proud Apple shareholder for quite a bit. In a way, it is because I value the Warren Buffett approach of investing in few stocks whose business I understand. Right after my olive oil business, Apple is the business that I believe I understand the best. And I am excited about what the near and long term future might bear for my dear Cupertino stock. In particular, call me a fool but I totally buy the argument made by Jason Schwarz of Seeking Alpha, that basically states the following:

1. the P/E ratio is the single most important number in the world
2. Apple has consistently traded at an average P/E ratio of 32.17
3. forward P/E ratio is calculated from future estimated earnings. the average forward P/E ratio for Apple since 2003 is 22.48. Based on the new accounting rules soon to be put in place, and the 37 billion in cash that Apple has on their books, Apple’s forward P/E is below 13
4. This stock has not been priced this cheaply since Steve Jobs came back to Apple in 1997
5. the stock should be priced at $263 today and should reach $376 by September 30, 2010, and could very likely be at $456 by the close of its fiscal year on September 30th.

Enjoy the whole spill at Seeking Alpha.

Apple stock is cheap! Load it up NOW and order your Ferrari for Christmas 2010!

Now go ahead and post a comment here if you agree or prove Jason wrong if you have a better argument.