By Oliver Pursche

Apple's (AAPL) stock has been slapped around a bit lately and I couldn't be happier about it.
 
It's a screaming buy. With the most recent swoon, the yield went to 2%, equivalent to the yield of the S&P 500 (INX). While there's a lot more risk in AAPL, as a single stock, it's hard to disagree that the growth potential of AAPL dwarfs the aggregate growth potential of the S&P 500.
 
But that's not the main argument. In my view, the stock is egregiously mispriced.

With a consensus estimate of $49.51 (based on the forecasts of 39 analysts, to September 2013), the forward price to earnings (P/E) of AAPL is 10.96 times the consensus 2013 forecast. That's less than GE (GE). That's less than Wal-Mart (WMT). That's less than Post-it maker 3M (MMM).

In short, the way Apple stock is priced right now, current investors are not being rewarded for growth. However, that means new investors can buy the stock without paying a premium for growth.
 
It's interesting to do a bit of an etiology of the current perception suggesting Wal-Mart has more growth ahead of it than AAPL. First, there was the earnings miss reported in July. Then there was the so-called map app fiasco. Then there were the October results that fell short of expectations with a slowdown of iPhone sales and lower-than-expected iPad shipments.
 
I'm not going to parrot the company's remarkable achievements, historic cash hoard, and 2% dividend. What I am going to say is that one of the joys and frustrations of the stock market is the degree to which human emotion plays a role in short-term pricing. Investors overreact to bad news and as a result, stock prices tend to drop disproportionately to the true and ultimate impact of bad news.
 
Certainly an earnings miss followed by lower-than-expected sales in two core products is a cause for concern. But selling off AAPL shares to the point where they reflect a no-growth scenario? Now that's an overreaction!
 
My forecast? I expect AAPL shares to hit $800 in 2013.
 
I might add that if you want securities that move in tune with logic, buy and/or trade bonds. The prime rate and a company's cash flow pretty much set the agenda for pricing. Unless, of course, there's a housing bubble and the rating agencies go verklempt. In that case, all bets are off.
 
When you are a buyer, this is the where they joy comes in (and when you are an owner or a seller, this is where the frustration sets in).
 
The way Apple is priced right now, the stock is not being rewarded for growth.

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