Apple Inc. (NASDAQ:AAPL) has been among the top stocks in 2014, with stock price going up by more than 40% in 2014. Apple Inc. (NASDAQ:AAPL) also achieved the status of the company with highest market cap ever as it crossed 700 billion market cap. Many believe that Apple Inc. (NASDAQ:AAPL) has the potential to become the first trillion dollar company. In spite of all these advantages, many feel that Apple stock is a cheap one. Holland & Co. Chairman, Michael Holland talked about the Apple Inc. (NASDAQ:AAPL) stock on Bloomberg TV.
A Blue chip stock as derived from poker points to a stock which is expensive and deserve to be expensive. Can Apple Inc. (NASDAQ:AAPL) stock be qualified as a blue chip stock? Holland doesn’t think so. He feels that it is still inexpensive, but not far away from becoming a blue chip stock.
He pointed out that three to five years ago, Apple Inc. (NASDAQ:AAPL) stock was very cheap, but it is not any more ridiculously cheap. He added that it might become an expensive stock very soon.
“It doesn’t get priced like one (blue chip stock). 12 times earnings, some people would say for next year’s earnings. It doesn’t get priced like that. Eventually it will. Five years ago, three years ago and two years ago we talked about how it is ludicrously cheap, it’s now moving closer and closer to the blue chip valuation,” Holland said.
Holland said that Johnson & Johnson (NYSE:JNJ) priced at 16 times earnings and Apple Inc. (NASDAQ:AAPL) priced at 12 times earnings doesn’t look right at all. He mentioned that he is holding both the stocks though. He said that Johnson & Johnson is a good company and he is holding on to that stock for a very long time, but he feels that Apple Inc. (NASDAQ:AAPL) is a more exciting company to hold on to.
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