Markets are forward looking. This should be intuitively obvious. The reason that I bring this up is that I keep getting emails from Seeking Alpha telling me that Apple is grossly undervalued. Usually they quote the P/E ratio or some other valuation metric. What they are missing is that markets are usually forward looking. In my opinion the market is saying that profitability is going down. This, of course, could be right or worng. Time will tell.
Despite the fact that profits will likely go down I still think the stock represents decent value here. A great deal of bad news is worked into the stock and a positive surprise this week will move the stock higher.
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