NEW YORK ( TheStreet) -- Fund manager David Einhorn made headlines for a few days when he called Apple ( AAPL) "misunderstood."
Next, Einhorn will cry that he -- or Apple -- is broke. Plenty of misunderstood stocks exist. Some are bid higher because longs lack the capacity or refuse to see the obvious. Netflix ( NFLX) goes down as 2011's best example of this. And then there are stocks that confound investors because they do not fully understand key aspects of the company's story. Apple fits neither category; in fact, it's probably one of the most straightforward propositions the market has to offer. Heck, it's up about 134% over the last two years. Investors misunderstand Coinstar ( CSTR) as much as they misunderstand Netflix. While I have never been much of a Coinstar bull, its management, despite a guidance misstep here and there, appears to have a steadier handle on its business than Reed Hastings has on Netflix. For whatever reason, investors have bid up a stock floated by a company with an unworkable, scatterbrain business model, rather than one that moves forward prudently. Netflix, for all intents and purposes, abandoned its DVD business prematurely. It took the emphasis off a highly profitable segment that generated desperately needed cash to focus on what Hastings considers the future: streaming. While few would argue with that vision, you cannot push it before its ready. Sometimes, you just have to let the future come to you. DVDs have not yet died; in fact, they have quite a bit of life left in them. I think Coinstar realizes this, though it's difficult to tell. Coinstar executives do not routinely update investors with Facebook ( FB) postings and YouTube videos. They prefer official avenues, such as public Securities and Exchange Commission filings. Coinstar clearly benefited from Netflix's well-publicized problems, with its stock climbing about 49% year-to-date. Despite that gain, investors have yet to value it anywhere near where they valued Netflix at the height of its absurdity. Even today, with Netflix posting losses, it sports a loftier stock price relative to Coinstar.