Take Advantage of Apple Inc. (AAPL)’s ‘Steve Jobs Premium’

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Apple Inc. (NASDAQ:AAPL) has had a wild ride in 2012. After gaining over 74% on the year to touch an all-time high of $705.07, shares of the tech giant have fallen on fears of a disappointing first quarter financials, the looming fiscal cliff, a rather embarrassing Maps fiasco, and a shakeup in upper management. Now, the Cupertino bears (see "Here is Why Apple Could Fall Below $425") will also argue that long-term worries about Apple include: (1) Tim Cook's inability to be exactly like Steve Jobs, (2) departure from tried-and-true strategy with the iPad Mini, (3) strategic partners -- such as China Mobile -- unwillingness to settle for Apple-sided deals of yesteryear, and (4) a general lack of innovative products on the horizon.

Apple Inc. (NASDAQ:AAPL)

As we've recently discussed, one of Jim Cramer's favorite Apple analyses (see "Jim Cramer Loves This Contrarian View of Apple") came via Darrell Etherington on the Washington Post, that poked a hole quite nicely in the majority of these fears. Most notably was Etherington's assertion that Tim Cook should be considered to be on par with Steve Jobs in terms of innovation, the only difference being that Jobs's successor has a bit better grasp on supply chain creativity than product design.

Interestingly, another former Apple Inc. (NASDAQ:AAPL) CEO was recently on CNBC discussing the state of the company's shares, John Sculley. Sculley was originally made chairman of Apple in 1983, and between 1985 and 1993, he managed day-to-day operations while Steve Jobs was away at NeXT. On the current situation Apple is in, Sculley had this to say:

"I think they're going through a very significant change now in terms of product cycles. Traditionally Apple introduces products once a year; now it's really introducing products twice a year. The complexity of that from a supply chain is immense, and Apple seems to be doing it well. So, I think that people are underestimating just how well Apple is run, and just how successful the company can be when it gets to that twice-a-year product introduction cycle.

Sculley's comments here seem to agree with the unheralded notion that Tim Cook is a supply chain wizard; on the subject of Apple Inc. (NASDAQ:AAPL)'s valuation, the former Cupertino CEO said that "the question is: does it still deserve a Steve Jobs premium?" to which he paraphrastically answers 'yes,' due to the fact that Cook has a clear product leader in Jony Ive.

When looking at the numbers ourselves, we can't help but notice that the stock's recent selloff may have shaved off most of that so-called 'Steve Jobs premium,' making now a great time to get in if you hold the same conviction as Sculley does. Between 2006 and 2010, AAPL shares traded at an average of 25.7 times trailing twelve month earnings, at a premium of 64% above the S&P. At its present price in the $586 range, however, the stock currently sports an earnings multiple of 13.3X, or a near-10% discount to the broader market averages.

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