Apple 2.0

Covering the business that Steve Jobs built

At $558, Apple's share price may never have been cheaper

November 8, 2012: 6:57 AM ET

In Wednesday's trading its P/E fell below 12.6 for the first time in memory

Click to enlarge. Source: Bullish Cross

FORTUNE -- The chart above, posted shortly after noon Wednesday by Bullish Cross' Andy Zaky, says it all.

With the broader indexes in a post-election free-fall and several news services -- including Forbes, Reuters, Bloomberg and even CNNMoney -- describing the stock's 20% decline from its $705 September high as a "bear market," Apple's (AAPL) shares hit what Zaky believes are their lowest valuation ever. Lower even than the worst days of the 2008 recession.

The stock recovered somewhat from its intraday low of $555.75, but it closed with a twelve month trailing price-to-earnings ratio of 12.64.

The average P/E ratio for the S&P 500 is currently 15.60.

It's probably worth pointing out that the average S&P 500 stock doesn't have $120 billion in the bank or earnings that grew 59.5% this year.

UPDATE: Oppenheimer's Ittai Kiddron issued a note Thursday morning titled Apple Inc: "Overdone, Time to Buy." His conclusion:

Bottom line. We believe the sell-off is overdone and should correct. We view $620 as an intermediate target as investors review the good fundamentals in light of the sharp pull-back. To break through $620 we believe the shares need a better macro environment or a return to strong earnings beats/upside.

UPDATE 2: Never say never. Apple's valuation compression continued Thursday with a $20.25 (3.63%) loss that left the stock at $537.35 and its P/E ratio at 12.18.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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