Apple: The most undervalued large cap stock in the S&P 500

A blogger-analyst highlights the growing gap between its earnings and its stock price

Click to enlarge. Source: Bullish Cross.

"In just four-years," writes Andy Zaky in a passionately worded post published Sunday on his Bullish Cross blog, "Apple's earnings have grown 600% to $27.68, and its revenue skyrocketed 341% to $108.2 billion. That's the most explosive 4-year growth rate of any large-cap company on the entire S&P 500."

Yet Apple's (AAPL) shares closed last week at $363.57 with a price-to-earnings ratio (by his calculation 8.5) that Zaky characterizes as "abysmal."

Why the disconnect? Zaky blames the business press, in particular  CNBC, Bloomberg, TheStreet.com and Business Insider.

"There seems to be an ever-present sentiment-war being waged against Apple as it is constantly hit from all sides in a very concerted way," he writes. With the passing of Steve Jobs, he says, it's only gotten worse.

In an effort to balance the scales, he offers a series of charts contrasting Apple's sales and earnings growth rates with a stock price that has failed singularly to keep up. The chart that shows this most clearly is copied below. To see the rest, click here.

Click to enlarge. Source: Bullish Cross

Posted in: Andy Zaky, Apple, Bullish Cross, Business Insider, CNBC, Earnings growth, P/E ratio, Steve Jobs

• Did Apple's shares get singled out for punishment after 2008?

  When the company's blistering growth is factored in, it certainly looks that way

  Four years ago, before the 2008 recession, Apple (AAPL) was trading at more than 45 times earnings. Today it's trading at less than 15 -- a situation that frustrates investors no end.

  A little over a week ago, Dirk Schmidt, a German management consultant writing on one of our favorite blogs -- Horace Dediu's Asymco -- posed an interesting MORE

  Philip Elmer-DeWitt - Sep 5, 2011 2:59 PM ET
  Posted in: Apple, Asymco, Dell, Dirk Schmidt, Earnings growth, Google, Hewlett-Packard, Horace Dediu, Microsoft, P/E ratio

• Is Apple undervalued at $404?

  Now that the stock has finally broken through the $400 barrier, how high can it go?

  Last summer, when Apple (AAPL) was trading for $260 a share, we ran an item on some analytical work by Nicholae Mihalache, a Romanian mathematician who teaches at the University of Paris. He had prepared a series of charts tracking Apple's performance using various criteria, from the familiar P/E (price to earnings) ratio to the more MORE

  Philip Elmer-DeWitt - Jul 26, 2011 4:05 PM ET
  Posted in: Apple, Earnings growth, Nicolae Mihalache, P/E ratio, PEG ratio, Seeking Alpha, Share price, University of Paris

• How can they call Apple the 'darling of Wall Street'?

  The stock is up 330% since its 2008 low, but that's really nothing to write home about

  In an article posted Friday on Seeking Alpha, Fortune.com contributor Andy Zaky takes aim at a phrase that has attached itself to Apple (AAPL) recently: "the darling of Wall Street." (Google it; you'll be surprised how often it pops up in the financial press.)

  Apple is a darling, the thinking goes, because the stock has MORE

  Philip Elmer-DeWitt - May 13, 2011 7:40 AM ET
  Posted in: Amazon, Andy Zaky, Apple, Bullish Cross, Earnings growth, Financials, Google, NASDAQ-100, Netflix, P/E ratio, Wall Street

• Charting Apple's off-the-chart growth

  How can investors wrap their heads around 16 quarters of double-digit growth?

  To fend off what he calls "superlatives fatigue," Asymco's Horace Dediu posted a pair of charts Wednesday that put Apple's (AAPL) sales and earnings growth in perspective.

  The first, at right, assigns color bands to low, moderate, high, very high and exceptional (triple-digit) growth.

  The second, below, is a little harder to make sense of, but it shows how much bigger MORE

  Philip Elmer-DeWitt - May 4, 2011 2:08 PM ET
  Posted in: Apple, Asymco, Earnings, Earnings growth, Horace Dediu, Quarterly earnings, Revenue

• About Apple's P/E ratio

  In 2007, it was trading for nearly 50 times earnings. Today it's 16.7. What happened?

  I hate to quote Horace Dediu twice in one day, but sometimes it can't be helped.

  Wednesday's post on his Asymco blog features the chart at right, which plots Apple's (AAPL) share price (blue line) over the past four and a half years set against multiples of earnings (15 x EPS, 25 x EPS, etc.). The chart MORE

  Philip Elmer-DeWitt - Apr 27, 2011 7:03 PM ET
  Posted in: Apple, Asymco, Earnings growth, Earnings per share, Financials, Horace Dediu, P/E ratio, Steve Jobs