EV = market cap
+ (debt + minority interest + preferred shares)
- (total cash and cash equivalents).
It's that last bit that pushed Google (with $58 billion in net cash on the books) past Apple ($141 billion).
Of course, it's unlikely that anyone is about take over either company. And as Eassa points out in Apple: This Is Ridiculous, "there is absolutely no contest as to who the real 'boss' is" in terms of generating cash. (See chart.)
"I think this valuation gap is, frankly, absurd and worth exploiting," he concludes. "I'm starting to believe that Google has run far ahead of itself and -- despite how much I absolutely adore Google -- think that the pair trade here is probably to short Google/buy Apple until Apple's enterprise value is, once again, squarely ahead of Google's."
His advice, not mine.
Few stocks involve more guessing than Amazon. The company is tightfisted when it comes to disclosing data or metrics.
By Kevin Kelleher, contributor
FORTUNE -- No matter how much research is done before an investment, there always remains a little bit of faith when it comes time to place a trade. People may mock analysts when their forecasts are off, but the analysts who aren't pressured by their firms to dress up MOREKevin Kelleher - May 9, 2013 5:00 AM ET
Likely to exceed the tech sector's average 1.2% dividend, driving share price up $100
The institutions that hold 70% of Apple's (AAPL) shares lobbied Steve Jobs for years to put some of his company's rapidly growing cash hoard in their hands.
Now that his successor is talking openly about the company's discussions to do just that, the sell-side analysts have started to calculate how big their share might be.
The latest to weigh in MOREPhilip Elmer-DeWitt - Feb 16, 2012 12:06 PM ET
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