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Send to email | Buy Apple Now, Get Company Free In 7 Years (AAPL) in AAPL | By Alley In el 20-Nov-2008 | Apple's stock (AAPL) crashed to a new low today--just above $80. At this level, the company's enterprise value (excluding cash) is $52 billion, which is 6X trailing free cash flow of $8.5 billion.
6X!
How cheap is that?
Let's say Apple gets hit hard by the global economic collapse and free cash flow falls to $7 billion next year and stays there for the next decade. If you bought the whole company today, you would get your entire investment back in 7 years, and you would get all the cash Apple generated in perpetuity from there for free.
Or let's say it's even worse than that. What if Apple's free cash flow falls more than 30%, to $5 billion, and stays there for a decade. Then it would take you ten years to get your whole investment back, and you would get all the future cash the company generated from there for free.
Can Apple's stock go lower? Hell, yes--stocks can always go lower. Is it really cheap at this price? Yes.
See Also: Apple Stock Cheap, Cheap, Cheap

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