“Apple reported a 15% drop in quarterly revenue on Tuesday and a 27% tumble in earnings. The company’s shares responded with a more-than-5% gain for the week,” Jack Hough writes for Barron’s. “That’s a sign that investors have grown too gloomy in their view of the company, and that its shares have gotten too cheap.”

“Here’s another: There are 238 U.S. companies valued by stock investors at more than $20 billion. Apple ranks dead last among them, based on stock-market value (adjusted for debt and cash) divided by projected free cash flow,” Hough writes. “At 7.8 times free cash, Apple is 17% cheaper than second-to-last HP, which sells computers and printers. Not to knock HP, which is turning a managed decrease in revenue into hefty dividends, but recent financial results notwithstanding, Apple deserves a higher price because it’s not clear that the company is in decline.”

“Apple had 19% growth in services revenue during its latest quarter. That swelling stream can help smooth swings in the hardware upgrade cycle. The shares pay a 2.2% dividend, which looks likely to grow,” Hough writes. “Last spring, we predicted that the stock would rise from $108 to $150 in a year (“Why Apple Is Worth $150 a Share,” April 9). It now goes for $104. We still like it.”

Read more in the full article here.

MacDailyNews Take: Apple is the Rodney Dangerfield of tech companies.