An Apple Chart That's Been Going DOWN For 10 Years

From Reuters Scotty Barber, one of the only possible Apple charts you can make that doesn’t go up.

It’s a look at the company’s PE ratio vs. that of the S&P 500.

apple PE

Photo: Scotty Barber, Reuters

Note that this is the “forward PE”, so at the moment it’s based on estimated earnings, but the gist would be the same even if you used trailing PE.

Of course, this chart makes Apple investors pull their hair out, since the ‘E’ has been growing so fast, they don’t understand why it’s converged with the general market like this. In theory, fast growing earnings should cause higher multiples.

On the other hand, as fast as it’s growing, we don’t think there are too many companies out there that have reversed such a big secular trend of PE compression.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.

Tagged In

apple moneygame-us