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I'm curious how / what changes a stock with a very low PEG to have a price jump, causing a higher PEG.

In this case Apple has a P/E of 11.5 - 12 when you consider its 80B cash vs. 350B price. 8 quarters ago, they had 45% yoy earnings growth (quarter over quarter). That increased linearly in the last 8 quarters, to 125% yoy earnings growth in the last quarter.

When I've talked to some other "regular folk" about Apple, they say "their stock is really expensive" (only looking at the $400 price). So I believe a split would be helpful, but how helpful? Perhaps related, if Apple keeps generating tremendous cash, will it almost be forced into a dividend situation, putting them into a different "category" and view? In any case, since I've never seen a company with such a low PEG (that's readily understandable to the masses, vs something like a new biotechnology, etc), I'm curious what's going on and what might change. Have you ever seen a company with a very low PEG, suddenly shift?

Perhaps put another way, what does Apple need to do, to raise this ratio. Or, do they want it very low? Is this typical of companies with very low PEGs?

P.S. AMAZINGLY, as I am writing this post, I am watching the financial news and am hearing: "Apple has reached a new all time high." I wonder how many times they have said this as Apple has broken through one high after another the last several years, simply increasing in price. These statements must affect the minds of the viewer, "geeze, they're at an all time high ... I should have gotten in sooner ... ... ...). They're not coming on the news and saying, "Apple is at an all time low!!!". :-) With a PEG of around .2 - .1.

E.g. One can see price growth in the lower graph, and P/E in the upper. Notice the previous P/Es of 45, and then low P/E during market crash.

enter image description here

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closed as off-topic by Dheer, Nathan L, quantycuenta, GµårÐïåñ, JoeTaxpayer Feb 21 '14 at 14:27

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P.S. I heard an Apple analyst say today, Apple only has 5% of the total mobile phone market. That, with China sales small but increasing 6 fold yoy last quarter, also other large countries "coming online", it would be hard to make the argument, as large as Apple's market cap is, that the world wide market is anywhere close to saturated, not having an enormous "story" left. In other words, large market cap compared to available world-wide sales wouldn't be a very reasonable argument either. –  Ray K Oct 15 '11 at 0:57
It would seem too, that the undoing of various Microsoft monopolistic marketing and sales practices, so often blocking /failing superior technology, has a long way to unwind. I think that's just 50,000 foot stuff, video by new CEO on iPhone release is interesting, discussion various "financials" -- i.e Mac and PC growth rates, etc. (investor.apple.com in general), video here: apple.com/apple-events/october-2011 –  Ray K Oct 15 '11 at 4:34
:-) I think Apple should immediately go to a P/E of 30 (double), with corresponding stock price of $840. Of course that P/E wouldn't include the $80B in cash on hand. Well, with Amazon P/E at 105, how about quadruple up to a P/E of 60, ($1680 stock price), and hopefully grow earnings yoy at 120% ($3696). Of course with earnings growing at that rate, they'd still be undervalued, at a PEG of .5. :-) –  Ray K Oct 15 '11 at 8:22
There are multiple factors that affect PEG [price/earnings to growth ratio] and vary as such this is not a good question for Q&A –  Dheer Feb 20 '14 at 6:52
There are multiple factors that affect PEG [price/earnings to growth ratio] and vary as such this is not a good question for Q&A –  Dheer Feb 20 '14 at 6:52

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