Even after a huge rally, Apple shares still look ripe for picking

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When it comes to Apple (AAPL) it's pretty hard to make a bear case based on fundamentals. Sure, the company could be better positioned in the relatively faster growing international markets, there's the question of CEO Steve Jobs's health and it might be hard for the company to continue to top its own high standards. But that's about it.

Rather, the case against Apple usually comes down to valuation. It's no secret it's been a pretty great stock; it's just too easy to buy Apple when it's too expensive. Happily, even after rallying 120% this year to $198 a share, Apple's stock still looks attractive even at that lofty level.

On a forward-earnings basis, Apple shares go for 21 times earnings. That represents roughly a 14% premium to the S&P 500 ($INX), but that's more than reasonable for a company with a projected long-term growth rate of 18%, according to Thomson Reuters. In other words, the premium is well warranted. Furthermore, shares offer a discount of roughly 30% to their own five-year average.

Even more compelling, Apple might be more expensive than the broader market but its shares aren't keeping pace with the S&P's own rally (a good sign). We know this from Apple's price-earnings-to-growth (PEG) ratio, which offers nearly a 30% discount to the market. (PEG measures how expensive a stock is relative to its growth prospects.) These relative valuation metrics suggest Apple is still a bargain.

Finally, analysts' average price target stands at $233, according to Thomson Reuters, making the implied return 18% in the next 12 months or so. Given the brisk business Apple is enjoying early this holiday shopping season (not to mention the fact it has crushed Street estimates for at least eight quarter in a row), achieving that modest upside looks to be easy as pie.

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