Why Trading At Low Valuation Isn't Reason Enough For Apple To Move Higher

Whenever Apple Inc. AAPL's stock has took a downturn in the better part of the last decade, investors have comforted themselves by citing the company's low valuation. However, according to Sherri Scribner, Deutsche Bank senior equity research analyst, Apple's valuation is in a league of its own and can't be used to justify the stock moving higher.

Scribner was on CNBC Wednesday to explain why she thinks so.

Unique Valuation

"Well, I think, valuation for Apple is a very unique thing," Scribner began. "It's definitely a momentum stock and we had the sort of a positive momentum of the iPhone roll out. But when you think about valuation with Apple being as large as it is as a percentage of the S&P 500, it's very hard for them to get a market multiple, it's very widely owned."

She continued, "Some funds cannot own it more than a certain percentage, right? So, I don't know that ever will ever get a market multiple. If you look back at the last decline that they had, the P/Es fell to 9 to 10 times, which arguably is a very good valuation. But for Apple that's probably where we are now."

Stock Split Was A Good Idea

Scribner was asked if the 7-for-1 stock split the company did last year in June was the right thing to do. She replied, "I think, the stock split was a good idea. It made it more accessible to retail investors. I mean, the stock price is more palatable now. I don't think it was a bad idea to do that. We have seen a lot of stock appreciation since they have done that."