An Apple To-Day?

I’ve been out of Apple (AAPL) stock for the entire run over the last couple of years. I looked at it many times back then given its insanely low valuation but never liked the business. They had half the market cap in cash on hand with no debt, but I never could figure out what the catalyst might be.

Then the iPod happened and the run began. Two years later the stock is 600% higher, hitting a high of $86 in early 2006. I haven’t chased the stock on the way up, but for the first time in a long time AAPL shares appear reasonably priced. In case you haven’t noticed, the stock is down 30% from its high to a current $60 per share.

Current earnings estimates stand at $2.25 for 2006 and $2.75 for 2007. With $10 per share in cash and no debt, investors are getting the business for 22x current year profits. Looking out to 2007 the P/E drops to 18x. If any of you are out there wishing you hadn’t missed the run, the stock is down 26 points from its high and looks appealing if you think growth will continue for some time.