Here’s a snazzy Horace Dedieu chart, which shows that the stock market has, by some measures, grown increasingly skeptical of America’s second-biggest (by market cap) firm over the years even as it’s prospered:
Back before the crisis, the market was comfortable valuing Apple at something like 35 times earnings. If that pattern continued today, the company would have a staggering market capitalization. Instead, earnings have surged so much faster than share price that it now struggles to maintain a valuation of 15 times earnings.
Some people (including, I think, Dedieu) read this as a story about Apple being “undervalued.” I don’t see any particular reason to believe that’s true from an investment advice perspective. But it is an interesting story about the real operation of American corporations and financial markets. Among other things, the management doesn’t seem to particularly care about this even though the value to Apple shareholders of figuring out how to convince the markets to return to the high-multiple scenario would be worth huge sums of money to them.