FORTUNE — “History has repeatedly taught us that the best time to buy Apple is when the bearish sentiment in the stock has reached the pinnacle of extreme pessimism. When every guest on CNBC is calling for the imminent demise of Apple, when every headline is making a case for why Apple has peaked, and when the stock continues to slide by over a 2% a day right in the face of a market rally, that’s when you know it’s time to buy.”
That’s how Andy Zaky begins a 1,700-word polemic posted overnight Tuesday that constitutes his sixth Apple “buy” recommendation since 2006.
Zaky, an occasional Fortune contributor who now runs several hedge funds, including an Apple (AAPL)-only fund, is famous in certain investor circles for the timing and precision of these “buy” calls. At least two were made on the exact day Apple hit bottom. Four have already paid off handsomely and the fifth looks likely to do so as well. To recap:
- July 2006 at $50-$54, with a 6-month $100 price target
- November 16, 2008 at $88.14: 24-month $230 price target
- August 11, 2010 at $250.19: 18-month $400 price target
- June 17, 2011 at $320.00: 18-month $500 price target
- May 18, 2012 at $530: 8-month $750 price target
Now, with stock trading around $630, Zaky is on the record saying that it will hit $1,000 by this time next year, if not by next July.
Zaky’s fundamental argument, which he’s been making behind the paywall of his subscription-only Bullish Cross blog for weeks, is actually pretty straightforward. It’s based on the stabilization of Apple’s price-to-earnings ratio over the past six quarters — shown in the chart above.
Shortly after the 2008 market meltdown, Apple’s P/E ratio peaked at 35.87. Over the next two years, as Apple’s earnings (E) grew faster than its share price (P), that ratio got progressively squeezed until it fell below 15. Since then, the stock has hovered around a P/E level of 15 — which is roughly the S&P 500’s average and arguably too low the only mega-cap company that grows like startup.
That P/E of 15, Zaky writes, seems to be Apple’s center of gravity. When Apple’s P/E falls much below 15, the stock tends to pop. He offers last January’s Q1 2012 earnings report as an example:
Apple will open Wednesday with a trailing P/E ratio just under 15 and a forward P/E ratio below 12. It’s scheduled to report its fiscal Q4 earnings on Oct. 25. In addition, according to Zaky, several technical indicators suggest that Apple’s shares are “oversold,” meaning that there’s a lot big money available to pour back into the stock.
Zaky’s piece is titled “Apple $1000: Why it’s time to buy.” You can read it here.