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Apple projected to surpass Exxon, become world's largest market cap company

post #1 of 78
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Apple's meteoric rise could see it overtake oil giant Exxon-Mobil and become the world's largest company by market value, one new analysis has projected.

Brian Marshall with Gleacher & Company sent a note to investors this week in which he raised his price target to AAPL stock to $500, up from $450. But before either of those numbers is reached, Apple could become the largest market cap company in the world when the stock hits $445, based on his initial calculations done Wednesday.

Marshall's estimate assumes that the current leader, Exxon-Mobil, would remain flat, putting Apple in a position to become the largest company in the world, in terms of market value. But with Exxon stock up more than 2 percent Thursday afternoon, that makes Apple's target now even higher.

Still, Exxon is now within sight as Apple continues to grow. Marshall noted that Apple was only about 13 percent away from overtaking the company based on aftermarket levels reached when the company reported its quarterly earnings on Tuesday. During that period, the stock briefly broke the $400 barrier.

Apple currently sits at No. 2, having passed PetroChina Co. last September. Since then, the stock has hit a new all-time high, and is up nearly $100.



As of Thursday afternoon, AAPL stock has a market cap of more than $350 billion. The Cupertino, Calif., company surpassed Microsoft in May of 2010 when its market cap reached $222 billion, but the iPhone maker has since left its rival in the dust. Microsoft's market cap as of Thursday afternoon was less than $230 billion.

But Exxon's market capitalization has also continued to grow.
Since September, when the company was valued at $313 billion, the oil company has seen its market value surge to nearly $420 billion.

Apple's earnings reported on Tuesday wowed Wall Street, led by a record 20.34 million iPhones sold. The iPad also shipped a record 9.25 million units, as both platforms saw year over year growth percentages well into the triple digits.
post #2 of 78
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post #3 of 78
Quote:
Originally Posted by MacRulez View Post

Unless people buy more computers than they do fuel, I smell a bubble.

I'm grateful for how well my AAPL stock is doing, but it's getting kinda out there....

Maybe it's time to sell?
post #4 of 78
Quote:
Originally Posted by jj.yuan View Post

Maybe it's time to sell?

Never take investment advise from internet postings, including this one.
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post #5 of 78
Quote:
Originally Posted by MacRulez View Post

Unless people buy more computers than they do fuel, I smell a bubble.

I'm grateful for how well my AAPL stock is doing, but it's getting kinda out there....

In what way?
Please don't be insane.
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post #6 of 78
LoL it's FUNNY & Ridiculas at the same time
post #7 of 78
Quote:
Originally Posted by MacRulez View Post

Unless people buy more computers than they do fuel, I smell a bubble.

I'm grateful for how well my AAPL stock is doing, but it's getting kinda out there....

Margins on fuel are razor thin. How much gas must you purchase to put $200 profit in Exxon's wallet? I think Apple's latest quarterly profit exceeded Exxon's.

Apple still hasn't cracked the living room and they're working to insert themselves in the Credit/Debit payment processing chain ($13T in card purchases last year) with NFC enabled iOS devices. I think there's a bit of room yet to run.
post #8 of 78
Quote:
Originally Posted by MacRulez View Post

Unless people buy more computers than they do fuel, I smell a bubble.

I'm grateful for how well my AAPL stock is doing, but it's getting kinda out there....

Unless people start becoming more energy efficient (you never know) and/or people start using new kinds of computers in new ways, in more parts of their lives (you never know).
post #9 of 78
Quote:
Originally Posted by bsimpsen View Post

Apple still hasn't cracked the living room and they're working to insert themselves in the Credit/Debit payment processing chain ($13T in card purchases last year) with NFC enabled iOS devices. I think there's a bit of room yet to run.

There's more room to run in the BRIC countries too: Brazil, Russia, India, China.
post #10 of 78
Quote:
Originally Posted by Dr Millmoss View Post

In what way?

As you mentioned in another thread, P/E compression is still ongoing, but is Apple's P/E in the right position relative to its competitors? Apple 15.33, HP 8.89, DELL 10.25, IBM 15.03, MSFT 10.74, GOOG 21.89
post #11 of 78
Quote:
Originally Posted by MacRulez View Post

Unless people buy more computers than they do fuel, I smell a bubble.

I'm grateful for how well my AAPL stock is doing, but it's getting kinda out there....


It's not as crazy as it seems once you remember that Exxon pays a dividend
post #12 of 78
I kinda understand where you are coming from on that one,

I think though it is okay to hang on until at least 450 maybe even 500, at which point sell half... and then

Why because there still is China, iCloud and apple HDTV to come.

Then of course we could always ride it up and down over next few years between earnings at which point SJ will be gone and then the stock will tank 30% probably.. and buy in on rumor of a competent CEO, and sell on news of his appointment.




Quote:
Originally Posted by MacRulez View Post

Unless people buy more computers than they do fuel, I smell a bubble.

I'm grateful for how well my AAPL stock is doing, but it's getting kinda out there....

Originally by Rickers - 2014 : Cook & will bury Apple.  They can only ride Steve's ghost so long.



 Originally Posted by  thataveragejoe :  Next week  Korea Times, "I'm gay too"-Samsung



 



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Originally by Rickers - 2014 : Cook & will bury Apple.  They can only ride Steve's ghost so long.



 Originally Posted by  thataveragejoe :  Next week  Korea Times, "I'm gay too"-Samsung



 



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post #13 of 78
Quote:
Originally Posted by Dr Millmoss View Post

In what way?

I'm guessing that: (i) He has no clue, since it's one of his typical knee-jerk, anti-Apple posts; (ii) He owns no AAPL.
post #14 of 78
Quote:
Originally Posted by OriginalG View Post

As you mentioned in another thread, P/E compression is still ongoing, but is Apple's P/E in the right position relative to its competitors? Apple 15.33, HP 8.89, DELL 10.25, IBM 15.03, MSFT 10.74, GOOG 21.89

The question should be whether it's in the right position relative to its rate of earnings growth. Even with all the shock and awe coming from Apple's last quarterly report, the stock still did not break out of its compression pattern. Earnings were up 125% over a year ago. Is the stock up anywhere close to that much? No.
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post #15 of 78
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post #16 of 78
The recent oil reserve release from our Strategic Petroleum Reserve had a tremendous impact in reducing oil prices. The government had indicated that they may do this again in the future.

CNN: Obamacare largest tax increase in American history

 

FORBES: ObamaCare's 7 Tax Hikes On Middle class

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CNN: Obamacare largest tax increase in American history

 

FORBES: ObamaCare's 7 Tax Hikes On Middle class

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post #17 of 78
You have to believe that Apple has a GREAT 10 year plan in place that should keep them on these upward pattern probably till then. Sure something drastic could happen, (S. Jobs being lost in one way or another). But the plan would still stay in place regardless.
Can't really see anybody out there that could outsmart Apple and have them retract in any way, (still 10 years is a ways out).

But as far as Exxon. What could the next 10 years bring? A lot of players out there are really going hard into different energy consumption. That and also Exxon is not immune to some kind of accident. BP got hit pretty hard by that.
post #18 of 78
Quote:
Originally Posted by cloudgazer View Post

It's not as crazy as it seems once you remember that Exxon pays a dividend

It has nothing to do with the dividend. It has all to do with the price of oil the past year.

If oil process come down, then the stock will drop a lot.
post #19 of 78
If Apple becomes the largest market cap, I hope Steve Jobs takes time to pat himself on the back. Starting in his garage, he built the most valuable company in the world.

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post #20 of 78
Quote:
Originally Posted by Dr Millmoss View Post

The question should be whether it's in the right position relative to its rate of earnings growth. Even with all the shock and awe coming from Apple's last quarterly report, the stock still did not break out of its compression pattern. Earnings were up 125% over a year ago. Is the stock up anywhere close to that much? No.

If this page comes through intact, we can see where some of the inequality lies. Some of the stocks that were way up today don't deserve to be. Some deserve to have gone down!

http://markets.money.cnn.com/secure/watchlist/Index.asp
post #21 of 78
Quote:
Originally Posted by melgross View Post

It has nothing to do with the dividend. It has all to do with the price of oil the past year.

If oil process come down, then the stock will drop a lot.

Of course it relates to the dividend - whenever a firm pays a divided the market cap drops by a related amount, normally a little under the dividend amount.

If Exxon hadn't been paying dividends all these years they'd have even more cash than they do, and an appropriately larger market cap. Alternatively if Apple was paying out a dividend its market cap would be growing less quickly.
post #22 of 78
Quote:
Originally Posted by cloudgazer View Post

Of course it relates to the dividend - whenever a firm pays a divided the market cap drops by a related amount, normally a little under the dividend amount.

If Exxon hadn't been paying dividends all these years they'd have even more cash than they do, and an appropriately larger market cap. Alternatively if Apple was paying out a dividend its market cap would be growing less quickly.

You're confusing the ex-dividend price with what actually drives stock prices in the long-run, i.e., the company's fundamentals. In the case of XOM (or any other oil company), as has been pointed out to you, it is essentially a bet on oil prices. (Your argument would only be true if XOM's cash flows were expected to remain flat or decline from here on.)
post #23 of 78
Quote:
Originally Posted by MacRulez View Post

That's a very good point.

No, it's not. Unless you can perhaps provide an explanation.
post #24 of 78
Quote:
Originally Posted by bsimpsen View Post

Apple still hasn't cracked the living room and they're working to insert themselves in the Credit/Debit payment processing chain ($13T in card purchases last year) with NFC enabled iOS devices. I think there's a bit of room yet to run.

Quote:
Originally Posted by cvaldes1831 View Post

There's more room to run in the BRIC countries too: Brazil, Russia, India, China.

Good points.

But the declining cash flows from iPods could slow the rate of growth somewhat.
post #25 of 78
Lest we forget:

Apple Death Knell #56
post #26 of 78
Quote:
Originally Posted by anantksundaram View Post

You're confusing the ex-dividend price with what actually drives stock prices in the long-run, i.e., the company's fundamentals. In the case of XOM (or any other oil company), as has been pointed out to you, it is essentially a bet on oil prices. (Your argument would only be true if XOM's cash flows were expected to remain flat or decline from here on.)

No - I'm not confusing it at all. When comparing the returns of two firms over any period you have to include dividends. Any decent stock price history system will include both the dividends and the splits in order to present total returns. You have two time-series, one of stock prices and one of corporate actions.

If XOM had retained an additional 100billion dollars in cash that would certainly increase it's current valuation, perhaps not by 100billion, but by a considerable amount. I don't know how much XOM has paid in dividends over the last few decades, but I imagine it's a fair amount.

XOMs stock price obviously correlates to oil prices, it also correlates to their untapped reserves, it correlates to the cost of their extraction, it correlates to their retained cash, it correlates to lots of things.

Even if you ignored all of that the correct question isn't 'which company has the greatest market cap', but 'which company has created the most shareholder value'. For that you not only want the full value of the dividends paid, you have to consider that value after being reinvested.
post #27 of 78
so is there still value in apple stock?

I would say yes, but then again I don't know much about stock.
post #28 of 78
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post #29 of 78
Quote:
Originally Posted by melgross View Post

If this page comes through intact, we can see where some of the inequality lies. Some of the stocks that were way up today don't deserve to be. Some deserve to have gone down!

http://markets.money.cnn.com/secure/watchlist/Index.asp

Your link wants me to sign in, so I'm not sure what point you were making with it.

I don't know what stocks deserve to do, only what they actually do.
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post #30 of 78
Quote:
Originally Posted by MacRulez View Post

Unless people buy more computers than they do fuel, I smell a bubble.

I'm grateful for how well my AAPL stock is doing, but it's getting kinda out there....

Apple has a massive growth potential. Think of all the poor people who still think a PC running Windows is modern technology ... they will move over in the end ... or those with those crappy cheap Android devices! Years of growth still to come. Then there is the next thing Apple will come out with that will no doubt be mocked and ridiculed by Apple haters as it goes super nova and causes tons of copy cats. Have faith ... AAPL $1,000
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
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post #31 of 78
Quote:
Originally Posted by anantksundaram View Post

Good points.

But the declining cash flows from iPods could slow the rate of growth somewhat.

iPod's decline is not only factored in by Apple it is planned by Apple. They have already replaced iPod with iPhones and iPads. Any iPods they still sell are a bonus.
From Apple ][ - to new Mac Pro I've used them all.
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
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post #32 of 78
Quote:
Originally Posted by MacRulez View Post

I'm not a professional investment counselor, and the old rule of thumb that if you hear a stock tip from your barber it's too late may well apply here, but my own hunch is that AAPL will continue to rise through at least the end of this year.

That's a variation on the old JP Morgan 1929 story, where he supposedly said that he knew it was time to sell when he started getting stock tips from his shoeshine boy.
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post #33 of 78
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post #34 of 78
Quote:
Originally Posted by Dr Millmoss View Post

Never take investment advise from internet postings, including this one.

Don't undervalue yourself. A few weeks back I interpreted your hand-wringing over Apple's P/E ratio as a buy signal. I've been closing out the option positions I opened back then the last two days. Many thanks.

Quote:
Originally Posted by Dr Millmoss View Post

That's a variation on the old JP Morgan 1929 story, where he supposedly said that he knew it was time to sell when he started getting stock tips from his shoeshine boy.

Precisely.
post #35 of 78
Quote:
Originally Posted by quinney View Post

Don't undervalue yourself. A few weeks back I interpreted your hand-wringing over Apple's P/E ratio as a buy signal. I've been closing out the option positions I opened back then the last two days. Many thanks.

Never was a response of "whatever" more deserved.
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post #36 of 78
Quote:
Originally Posted by MacRulez View Post

The income distribution curve disagrees.

Apple is doing well because they have the highest margins in the industry. Meanwhile, there's a substantial segment of the market that continues to shop on price. Always will be. Apple doesn't care about those customers, and ignoring them obviously hasn't hurt their bottom line. Pursuing such customers would mean joining the "race to the bottom", not a game Apple plays.

In short: there is a growth cap inherent in Apple's positioning. Unless the income distribution curve shifts radically, or Apple starts dropping prices, saturation will eventually become evident.

For iPhone, perhaps, for iPad almost certainly not. The iPad is not being priced as a premium product, which is why none of the android makers have been able to meaningfully undercut it. Apple's margins there are because of the tremendous comparative volume.

As to whether Apple will choose to play further down the income distribution curve for iPhone, that's not yet clear - just because it hasn't yet doesn't mean it definitely won't.
post #37 of 78
Quote:
Originally Posted by MacRulez View Post

The income distribution curve disagrees.

Apple is doing well because they have the highest margins in the industry. Meanwhile, there's a substantial segment of the market that continues to shop on price. Always will be. Apple doesn't care about those customers, and ignoring them obviously hasn't hurt their bottom line. Pursuing such customers would mean joining the "race to the bottom", not a game Apple plays.

In short: there is a growth cap inherent in Apple's positioning. Unless the income distribution curve shifts radically, or Apple starts dropping prices, saturation will eventually become evident.

Regarding income, I recall hearing here that China was a waste of time for the same reasons. Sometimes people save up or figure out paying twice as much is worth it in the long run.

Also Apple can make low end product that are way better, look at the iPad, it came in so low no one can compete! I agree Apple will never make 'cheap' product but they can make damn good inexpensive ones. Apple TV is almost a give away and it is amazing.
From Apple ][ - to new Mac Pro I've used them all.
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Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
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post #38 of 78
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post #39 of 78
Quote:
Originally Posted by cloudgazer View Post

Even if you ignored all of that the correct question isn't 'which company has the greatest market cap', but 'which company has created the most shareholder value'. For that you not only want the full value of the dividends paid, you have to consider that value after being reinvested.

1) Changing the question to suit your answer is plain silly.

2) There's not much to ignore in your first three paras. As an aside, past shareholder payouts have nothing to do with the stock price, which are based on the expected future evolution of fundamentals.

Here's a simple question: Tomorrow, if XOM were to announce an increase its dividends, do you think it is more likely that its stock price would rise or fall?

A small request: Please refrain from making bombastic statements about things which you do not seem to have thought through well.
post #40 of 78
Quote:
Originally Posted by digitalclips View Post

iPod's decline is not only factored in by Apple it is planned by Apple. They have already replaced iPod with iPhones and iPads. Any iPods they still sell are a bonus.

I am sure it as been factored in by Apple.

The issue is whether it has been by analysts and markets. Perhaps it has been by the latter, but I am not not sure about the former - and this article is about an analyst making a price forecast.
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