Google’s stock continues to break down: Now $330 and still falling. A number in the $200s is perfectly plausible for that one.
Apple, on the other hand, is being snatched up whenever it falls below $90. To reiterate what we said two days ago, the first time this happened:
- Apple has $23 a share of cash (and no debt).
- Excluding this cash, the business itself is valued at about $58 billion (at $90)
- This is less than 10-times trailing free cash flow of $6 billion.
That’s trailing free cash flow, not some analyst dream.
Will Apple get hit by the global slowdown? Yes, we think so. Could the stock go lower? Of course. Does Apple need a succession plan? Yes.
But…Will Apple get crushed in a slowdown? We would be shocked if it did. Is a major slowdown in the stock at $90 a share? We think so.
So we can certainly understand why some big buyers are hoovering up the stock every time it breaks $90 a share.
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