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Market cap, schmarket cap, Apple still gets no respect

Apple Inc

COMMENTARY A new run on Apple (AAPL) stock has driven up the price to nearly $500 a share, and its market value past $450 billion. As AppleInsider noticed, the company is now worth more than Google (GOOG) and Microsoft (MSFT) combined. Finally, recognition for financial greatness, right?

Wrong. A quick look at the price to earnings (P/E) ratio -- a comparison of net profit and the price per share -- shows that the company is still far from being the ... sorry ... apple of Wall Street's eye. But there are some good reasons. For all the cash Apple brings in, big investors keep saying that it's too good to remain true forever. And they're right. The question they have is when the good times will end.

Rodney Dangerfield joked that he got no respect, no matter what he did in his life. If investors express their regard for a company by how many multiples of earnings they're willing to pay for a share of stock, then, with a P/E ratio of 14.10, Apple is far from remarkable. Here are the top 5 tech companies by P/E ratios, according to Google Finance:

--INX: 23,000
-- 6,095.79
--Quantum Corp.: 2,588.78
-- Move Inc.: 2,260.35
-- LinkedIn: 1,495.95

OK, so there's some craziness in the market. But look at Apple compared to Microsoft (11.09) and Google (20.52). Oracle is at 15.79. For that matter, look at the 66.18 of open source software company Red Hat and the 256.15 for voice-recognition firm Nuance. Forget the insane multiple that Facebook could get when it goes public.

If you're not satisfied with P/E ratios, consider price to sales ratios. Apple is at 4.11 while Microsoft has 3.68; SAP, 4.13; Google, 5.23; and Nuance, 6.73. Apple still ranks as nothing remarkable.

Waiting for the other shoe to drop

Apple's drive to the top has been extraordinary. It is by far the largest company in market value (surpassing Exxon in January). Few, if any, other companies have ever amassed such a dominant size and still had the growth of an early-stage start-up. But the very sense of unnatural accomplishment is partly what trips Apple. Pulling off mind-boggling business accomplishments one quarter after the next is impressive, but experience and the law of averages suggests that it won't last forever.

Google is in part a reason, because Android picks up adoption faster than Apple's iOS, the software that runs the iPhone and iPad, can. But it's not just Google. There are only so many new markets for devices. Apple goes into new areas, but breaking into something like television will be much harder, largely because people have to pay the full freight themselves rather than getting subsidies. Also, eventually brands trip up and fall out of favor.

Maybe Apple can maintain the same blistering pace for another few years, but that will depend on finding new product categories that can fuel unending popularity. Wall Street likes Apple, but doesn't want to bet the rent on the future.