P/E ratio

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

"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 MORE

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

Apple is cheaper at $353.21 than it was at $78.20

Its P/E ratio hit 13.97 Monday, lower than at the depth of the 2008-2009 meltdown

Reader Travis Lewis points out that after Monday's $20.41 (5.8%) drop, Apple's (AAPL) price-to-earnings ratio has fallen below the low point set on Jan. 20, 2009  -- six days after Steve Jobs announced his second medical leave -- when the stock closed at $78.20.

To make the comparison, Lewis had to go back to Apple's non-adjusted earnings MORE

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

The 3 most undervalued tech stocks: Google, Apple, IBM

By the same "PEG" measure, the 3 most overvalued are Amazon, Cisco and Netflix

Here's a simple exercise suggested by one of my readers.

Take a stock you're interested in and calculate its price/earnings to growth ratio, better known as its PEG ratio. The formula looks like this:

According to Peter Lynch, who popularized the measure, the P/E ratio of any company that's fairly priced will equal its growth rate. In other words, MORE

Michael Holland on Apple: 'These are crazy numbers'

On Bloomberg TV, the head of Holland & Co. joins the chorus mystified by AAPL's valuation

Michael Holland can't believe Apple (AAPL) is selling for 11 times next year's earnings.

"Apple's not being picked on," he told Bloomberg's Carol Masser Wednesday, "they shouldn't take it personally."

Holland, who worked for J.P. Morgan, Salomon and Oppenheimer before starting his own private investment firm with $4 billion in assets, names Google (GOOG) and Microsoft (MSFT) MORE

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

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

Apple closes above $320 per share

Apple (AAPL), which has been trailing the market recently, reversed the trend on Monday and closed up $2.71 (0.85%) in a down market to set a new all-time intraday high of $322.33 and a new high closing price: $320.15.

A few useful stats courtesy of the Wall Street Journal: