Apple Shares - Over priced?

[BFG]

I was looking at apple's share price today, and i was a bit worried that it seems overvalued with hype from the iphone?

I mean over the last year apple have had amazing returns, but since the launch of the iphone it just seems abit overpriced.

So my question is: are apple's share prices overvalued?

 

[Benjamin]

actually if you were looking at the graph of trends for the stock you would see the iphone hype has already passed (high of 97.8) .... and stock price has returned to before iphone prices (mid 80s).

 

[BFG]

Even so 84.75 (last time i checked) is still abit above the NMP.
If you look at the P/E ratio thats 30x - which is pretty high, in all respects.

I dont know the answer to the question so thats why i thought i'd ask and see if anyone could prove if they are over valued.

 

[Me1000]

I dont think a share can be over priced,

The whole concept of it being over priced just seems alien to me

 

[CEAbiscuit]

Yes. If you are thinking of selling to make a profit but are not sure, just sell half.

 

[IJ Reilly]

I dont think a share can be over priced,

The whole concept of it being over priced just seems alien to me

Exactly. The markets decide each and every day whether shares are over or under priced. Also, PE is a pretty much useless number when it comes to valuing a company which is growing as quickly as Apple has over the last few years.

 

[BFG]

Well, shares can be over valued; i.e. when some bad news comes out, the share price will drop massively. Just because they are determined my market forces does not mean that overpricing will never occur, because it does - alot.

 

[WildCowboy]

Well, shares can be over valued; i.e. when some bad news comes out, the share price will drop massively. Just because they are determined my market forces does not mean that overpricing will never occur, because it does - alot.

When the bad news comes out, that's a change in the circumstances. It was fairly valued prior to the release of the news, and it was fairly valued after the news was release, just at different values. It's the basis of a semistrong efficient market.

 

[IJ Reilly]

Well, shares can be over valued; i.e. when some bad news comes out, the share price will drop massively. Just because they are determined my market forces does not mean that overpricing will never occur, because it does - alot.

Actually no, because this presupposes knowledge that nobody has at the time. It's an exercise in perfect 20-20 hindsight to claim that a stock was overvalued when it goes down after some bad news comes along. The markets set the value on any given day based on what markets know, or think they know, on any given day.