After the past year's rally, many stocks have hit new heights. Shares of Apple (Nasdaq: AAPL) reached an all-time high of $219.70 on Friday, for example. But some investors fear that these dramatic increases may have left too many stocks overvalued.

Low-hanging fruit
While it's reasonable to wonder whether a high-flying stock is overpriced, we should keep in mind that companies' winning streaks can last a lot longer than many investors suspect. A grossly undervalued company might jump 20% over a short period and still be priced below its true worth.

Similarly, while it can be useful to note which companies are hitting all-time highs or 52-week highs, remember that any successful company will unavoidably hit new highs at various points during its shares' steady march. It might even set a new record every day for many days in a row.

The hard way
As investors, our primary job involves buying undervalued companies and (maybe) selling overvalued stocks. To make that call in Apple's case, we must first get a good handle on its true intrinsic value. A discounted cash flow analysis could give us a solid idea, but that complicated method relies on assumptions about future financial performance. Thankfully, there are easier ways to suss out a stock's true worth.

For the simplest -- and haziest -- estimate of intrinsic value, compare Apple's market capitalization to those of its peers. Market cap is the number of total shares outstanding, multiplied by the share price, which for Apple works out to just about $200 billion. That makes it smaller than Microsoft (Nasdaq: MSFT) and its roughly $250 billion market cap, but significantly larger than IBM (NYSE: IBM) at $165 billion, or Google (Nasdaq: GOOG) at $180 billion. In addition, Apple's market cap dwarfs those of non-technology names such as Coca-Cola (NYSE: KO) at $126 billion and McDonald's (NYSE: MCD) at $70 billion.

Does Apple really deserve to loom so large against big and ubiquitous companies such as Coca-Cola and McDonald's? A simple market cap comparison won't give you a definitive answer, but it will likely help you see whether the question deserves closer inspection.

Time to dig deeper
Once you're ready for a closer look, start with these steps:

  • Consider the company's competitive advantages, including its brand power, reputation for innovation, and a base of dedicated customers. With Apple, user-friendly creations like the new iPad have been crucial to its success.
  • Dig into the financials. Apple has almost $25 billion in cash and short-term investments, with no debt, healthy profit margins, and solid revenue growth.
  • Put the company's numbers in historical context. With a current P/E ratio of 27, Apple is roughly in the middle of its five-year range, which spans 12 to 39.
  • Check out commentary on the stock in Fool articles. Fool contributor Tim Beyers sees several ways for Apple to improve its prospects.  

Together, all this information begins to suggest that Apple's shares aren't wildly overvalued -- though they also don't seem to offer the huge margin of safety that successful value investors would seek.

Is Apple undervalued, overvalued, or just right? What stocks do you think are good values right now? Leave a comment below and share your thoughts.