Apple, (NASDAQ:AAPL) an Undervalued Large Cap Tech Stock

 By: on Jun 19,2012 Posted in Business News ,Investment Ideas ,Premium
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The price earning to growth ratio (PEG), is used to determine a stock’s value while taking into account earnings growth. Investors widely use PEG ratio as an indicator of a stock’s potential value. Investors prefer the PEG ratio over Price to Earnings ratio as it also accounts for growth. Similar to the P/E ratio, a lower PEG shows that the stock is undervalued.

Many investors watch PEG ratios for valuation of the security. In the technology sector, five companies have a market capitalization of over 200 billion and Apple Inc (NASDAQ:AAPL) is widely viewed as the only one of those whose stock is undervalued.

AT&T Inc (NYSE:T) is a provider of telecommunications services in the United States and worldwide. The company has a market capitalization of 209.78 billion while its P/E ratio is 51.70. Institutional ownership of the stock is 56%. The price to earning to growth ratio is 5.76.

The second stock with more than a 200 billion market capitalization is China Mobile Ltd (ADR) (NYSE:CHL), provider of a variety of telecommunication products. The institutional ownership for the stock was 2% while its price to earnings ratio was 10.77. The PEG ratio of CHL was lower than AT&T.

Another tech stock, International Business Machines Corp, (NYSE:IBM) has a market capitalization of 229.72 billion while its price to earnings ratio was 14.82. The company offered earnings per share of 13.41 and has 1.15 billion shares were outstanding. The PEG ratio of IBM was 1.35 below China Mobile and AT&T.

The world’s biggest software maker, Microsoft Corporation (NASDAQ:MSFT), offered a $0.20 dividend while its EPS was 2.75. Microsoft’s market capitalization was 250.32 billion and its institutional ownership was 67%. Microsoft has a PEG ratio of 1.10 while its price to sale ratio was 3.45.

Apple Inc is the world’s most valuable company in terms of market capitalization. Apple Inc (NASDAQ:AAPL) has a market capitalization of 544.76 billion and its P/E ratio is 14.20. The stock has an institutional ownership of 69% and the Beta, which is used as a measure of a stock’s volatility in relation to the market, was 1.23 while the PEG ratio of the stock was 0.65 and P/E ratio was 14.20.

If investors analyze all five technology stocks over $200 billion in market capitalization, they will find that Apple is the only stock having a PEG ratio below 1 which is lower than all the other tech giants including AT&T, China Mobile, International Business Machines and Microsoft.

Disclosure: The assembled information is for information purposes only, and is neither a solicitation to buy nor an offer to sell securities. does expect that investors will buy and sell securities based on information assembled and presented in this article. PLEASE always do your own due diligence, and consult your financial advisor.

All the view presented in this article belongs to writer and PT-News will not be responsible for any kind of loss. Pual Ferrence don’t own any shares of apple nor have any plan to buy in next 72 hours. 


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