Continuation of part 6….
FUNDAMENTAL ANALYSIS:
Apple’s story cannot be told without first concentrating on its founder and the driving force behind the company, Steve Jobs. As you probably know, Steve Jobs was forced out of Apple in 1985, only to return as Apple’s CEO in 1997. It was at that point that “Chapter 2” in Apple’s history began. Steve was able to bring the company back from its near death experience by introducing a number of popular PC’s, cutting costs and by securing a large investment from Microsoft. Immediate after his return Apple’s stock price started to surge, appreciating close to 1,000% by March of 2000 (A Tenbagger in 2.5 years). Then, the Nasdaq crashed and so did Apple’s stock price. Going from $20 a share to $2 a share in a matter of 9 months.
To establish a clear picture of what had happened over the last 12 years we must first study the fundamental growth of the company between 2002 and today.
| Key Statistics | 2002(December 31, 2002) | 2014 (July 8th,2014) |
| Price Per Share | $2.00 | $95.00 |
| Market Cap | $15.5 Billion | $575 Billion |
| Earnings Per Share | $0.026 | $5.96 |
| P/E Ratio | 77 | 16 |
| Price/Sales Ratio | 2.72 | 3.27 |
| Price/Book Ratio | 2.94 | 4.8 |
| Revenue | $5.7 Billion | $ 176 Billion |
| Net Income | $65 Million | $38 Billion |
| Annual Earnings Growth | 7%(revenue) | 9.2% (fiscal 2013) |
| Total Cash | $415,000 | $41 Billion |
| Total Debt | $4.3 Billion | $17 Billion |
| Book Value Per Share | $0.68 | $20.5 |
| Shares Outstanding | 6 Billion (split adjusted) | 6 Billion |
| Total Assets | $6.2 Billion | $207 Billion |
| Shareholder Equity | $4.1 Billion | $123 Billion |
As we analyze the data above, one thing jumps out at us immediately. Apple’s fundamental growth has been as impressive over the last 11-12 years as its stock price growth. During this period of time revenue grew by 3,733%, earnings per share increased by 22,846%, book value grew by 2,914% and shareholders equity jumped by 2,900%. More than justifying the rise in the stock price.
We must now go back to the 2001-2002 period in order to determine why the company was selling at such a discounted level and what fundamental changes would occur to propel the stock price higher.
While it might be hard to believe, back in 2002 about 80% of Apple’s revenue was generated through the sales of their Macintosh, PowerBook, iMac and iBook products. And while they were already selling iPod’s (introduced in 2001), this revolutionary product hasn’t even began to gain traction yet. In simple terms, Apple was just another PC company in the midst of a massive Nasdaq/technology bubble bust. Yet, the company was already giving us a hint of what was to come.
From their 2002 Annual Report: The company believes that personal computing has entered a new era in which the personal computer functions for both professionals and consumers as the digital hub for advanced new digital devices such as digital music players, personal digital assistants, cellular phones, digital still and movie cameras, CD and DVD players, and other electronic devices.
To Be Continued Tomorrow……
I hardly leave a response, but i did some searching and wound up here How ‘Bout Them Apples.
(10 Bagger Book, Part 7) – Invest With AlexInvest With Alex.
And I actually do have 2 questions for you if it’s allright.
Could it be only me or does it give the impression like a few of the comments appear as if they are left by
brain dead individuals? 😛 And, if you are writing at other
online social sites, I’d like to follow everything fresh
you have to post. Could you list of all of all your social pages like your twitter feed,
Facebook page or linkedin profile?
Hello, thank you for your comment. Please check our home page (right side) for all of our social media links. Best regards,