The reason is simple. Apple’s growth is so phenomenal that it has vastly outstripped the share price, despite the new highs. The P/E (profit/earnings) ratio is about 15. He shows that not only is the P/E ratio declining, but it is now the lowest since the great recession. Excluding cash, Apple’s P/E on Friday was 12.4 and, on a forward basis, is could be as low as 7.
Some commentators on the Asymco blog suggest the share price ought to be much higher in view of the low P/E. Others wonder if Apple is being penalised by the dividend brigade (Apple has not paid a dividend since 2005, something that is very unusual in such a successful company).
Yet others wonder if a stock split, thus reducing the value of one share, would encourage a rise. All are possible, but there is something definitely strange about Apple’s low share price in relation to the booming business and future potential.
It certainly holds both the Air and the iPad. I do this often, with the air in the dedicated rear pocket and the iPad in the centre pocket. Bear in mind, though, that this is a compact bag, so the more equipment you want to carry the less space there is for other bits and pieces. It would probably suit you, though.
Michael