We all know, being loyal readers of the gajonka, that a stock that trades at $8 is not inferior to a stock that trades at $888. In fact, most of the time, the $8 stock will be larger, and more valuable - defined by asst size.
Guess how much profit Apple made last year- after taxes? $53 billion
Guess how much long term debt Apple owes at the end of the same year? $53 billion
Google netted 14 b last year and only had $3 b in long term debt. You would think, excluding cash, that Google would be more valuable right?
AAPL 636 b
Goog 501 b
Facebook is sneaky, they redefine their long term debt- calling it other liabilities. So they enter 119 million (mm) as their long term (l.t.) debt figure, and assign $2.5 billion to the column titles "other liabilities" - this is a column that has grown from $305 mm to 1.5 b to 2.5 b, per their income statements.
FB net income last year = $2.9 billion. Note how much smaller that figure is relative to aapl and goog.
FB market cap: 294 billion
Wow- how do we decipher this? This is valuation defined.
Finally, Netflix, has been borrowing $500 million more every year. They netted 266mm in '14, and enjoy a $4 7 billion market cap... who knows why.
All stock charts have risen over the past two years. What goes up must come down.
Stamps.com is one company that has room to grow.
STMP 37mm net income
STMP $1.5b market cap
Compare that with facebook.
Finally, CRM, saleforce.com - this company has lost money over the past 3 years.., but the stock price keeps rising!!!