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Don't be fooled by Apple's record high

Apple stock closed at an all-time high of $133.29 on Monday, but looks can be deceiving.

The company's market cap broke $700 billion, but it is still about $70 billion short of where it was the last time Apple's individual share price approached $133 two years ago. And despite the tech giant's high stock price, the actual performance of the company is worse than it was in 2015, with 16 percent lower net income and earnings per share down 9 percent.

In terms of reaching the elusive trillion-dollar market cap, the company is further away now than it was at other points in the last few years.

That's how stock buybacks can change people's perspective of performance. A company's earnings per share can be increased by merely eliminating shares. Apple's $70 billion worth of buybacks in the last two years have accomplished that. Over the last five years, buybacks have wiped out more than a billion shares.

Since September 2015, 6 percent of the company's shares have been eliminated. That action alone would help EPS rise by 6 percent, but the 15 percent decline in actual earnings doesn't help. In rough terms, when "E" drops 15 percent and "S" drops 6 percent, you get about a 9 percent drop in EPS. That's where Apple is now compared to two years ago.

The last four quarters have garnered Apple $45.2 billion in net income — a huge drop from the $53.4 billion it earned in the four quarters ending September 2015.

Consider those numbers in context with this so-called record high price. Record stock prices don't mean record performances. Stock buybacks can drive up EPS, but they don't change the fundamentals of a company.

In summary, Apple is worth about 10 percent less today compared with two years ago because its actual business seems to be worth at least that much less, despite the higher stock price. To get back to where the company was in 2015, each share would have to jump up about $14 more.

Not every record is a meaningful one.