Apple 2.0

Covering the business that Steve Jobs built

Charts of the day: Keep selling Apple and buying Google?

May 20, 2013: 7:54 AM ET

Eight months of what CNBC calls the Great Rotation has led to some odd imbalances.

Click to enlarge. Chart: Jeff F. Sources: Yahoo Finance and CNBC (for EPS growth rate).

*Sources: Yahoo Finance and CNBC (for EPS growth rate). Chart: Jeff F. Click to enlarge.

chart_ws_stock_appleinc_201352064330_240xaFORTUNE -- Tuesday marks the eight month anniversary of Apple's (AAPL) all-time intraday high of $705.07 a share, set on Sept. 21, 2012.

Meanwhile, last Friday, Google (GOOG) hit its own all-time intraday high of $919.98 -- just a dinner for two at McDonalds from $925, Google's mean 12-month price target according to Thomson/First Call.

This coincidence may not be entirely accidental. If the talking heads at CNBC are to be trusted, "sell Apple, buy Google" has been smart trade for months. They call it the Great Rotation:

"The bulls are in Google's camp and the bears are in Apple's camp at the moment," Strategy Analytic's Neil Mawston told CNBC.com in early March.

"After a strong run in recent years, Apple might be subject to some profit taking. Apple's share price may stay a little soft this year until it becomes clearer what their next blockbuster product is."

Ah yes, the "next blockbuster" meme.

To test the thesis that Apple is nothing without another blockbuster, reader Jeff F. put together the array of bar charts above. It reveals some fundamental imbalances -- including price-to-earnings, EPS growth rate and return on equity -- that suggest Google may now be over valued and Apple under.

Will the Great Rotation start losing momentum? Who knows. It's been a long time since fundamentals drove Apple's stock price in this market.

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About This Author
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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