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After Apple's fall, is it time to buy or sell?

Aug 25, 2011 9:39:00 PM - thestate.com
Should you buy or sell Apple?

After the announcement that Steve Jobs is stepping down as CEO, investors pushed Apple's stock down 0.7 percent on Thursday. By contrast, Wall Street analysts reacted with predictable optimism: Buy - a lot.

So who is right? The pros or the investors?

The short answer may be the pros, though the stock is probably not the bargain that many of them assume.

One popular way to value a company's stock is to look at how high it is trading relative to its earnings per share. It's a rough measure, but it does show that Apple is not much more expensive than the average company. At Thursday's closing price of $374 per share, Apple is trading at 12 times its expected earnings over the next 12 months compared with 11 times for the Standard & Poor's 500 index.

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