Apple Inc. (NASDAQ:AAPL) shares are grossly undervalued according to analysts at ValuEngine. Of course right now everyone has a view about what Apple should be doing to raise the price of its stock.

David Einhorn thinks the company should issue preferred stock to its shareholders, while Legg Mason portfolio manager Bill Miller said the company should give bigger dividends.


ValuEngine analysts issued a report to investors today explaining why they believe shares of Apple Inc. (NASDAQ:AAPL) should be trading at $580 per share instead of the less-than-$470-per-share price they have been hanging around at lately. They said this vast gulf between the actual trade price and the price they believe is fair, is a 21 percent undervaluation of the company.

The analysts said the price they believe Apple should be trading at is based on if the market “were perfectly efficient and everything traded at its true worth.” Among other parameters, they based Apple Inc. (NASDAQ:AAPL)’s valuation on actual earnings per share of the last four quarters, which was $43.78 per share. They also factored in the expected earnings per share of the next four quarters, which is $49.13 per share. Then they correlated the data to the 30-year 3.18 percent Treasury bond yield.

The analysts also looked at several additional parameters. According to their measurements, only 15 percent of other stocks are more undervalued than Apple Inc. (NASDAQ:AAPL) is right now. They do admit that Apple’s momentum needs some work, saying that more than half of other stocks have stronger momentum. In addition, they note that Apple shares have been quite volatile lately, saying that 32 percent of stocks have less volatility than Apple does right now.

According to ValuEngine analysts, “the best time to buy would be below $359.98,” while “the best time to sell would be above $1,161.24.” They based their market valuation of Apple Inc. (NASDAQ:AAPL) on the PEG ratio.