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Apple Now The Most Valuable Company In The World

99 points by sahillavingia 15y ago

onemoreact 15y ago
Wait, Exxon has a P/E of 8.86 that's rediculusly for such a stable company IMO. Am I missing something obvious or is it a great buy right now?
- glhaynes 15y ago
  Stable, non-growth companies typically have much lower P/Es. There's absolutely no chance that Exxon will double in revenue in the next couple of years; that's entirely possible for Apple.
  - rokhayakebe 15y ago
    I agree. Most people are already Exxon customers. Most people aren't Apple customers.
- usaar333 15y ago
  Exxon's income is highly dependent on the price of oil. See their historical numbers: http://www.google.com/finance?q=NYSE:XOM&fstype=ii http://www.google.com/finance?q=NYSE:XOM&fstype=ii With oil at lower prices ($80/barrel now), their net income can significantly fall.
- MrHobbes 15y ago
  I haven't had the time to look at the numbers myself recently, but I have heard from some oil industry friends that I know that Exxon is currently in a state of slow-motion liquidation. From what they are saying, exploration and expansion has not really taken a high priority within the company in recent years, and the emphasis seems to be more on maintenance. I don't really know about the extent to which this is true, but if this is the case then it could possibly explain the low p/e ratio. Personally, I think that the problem with Exxon is that it is an oil company and oil prices are connected with world economic outlook. (Most economic activity requires energy, which oil just happens to be a great source of.) World economic outlook is a bit grim right now, so Exxon's outlook is as well. When economic activity heats up again then oil prices will rise, and, at that point, I am quite sure that Exxon will be doing quite well again. This post does not constitute investment advice.
weston 15y ago
They're actually swapping places back and forth, since the market hasn't closed yet (as of 2:54 EST).
thought_alarm 15y ago
Next on the agenda for Apple? Purchase Michael Dell.
- A-K 15y ago
  Almost fifteen years later, and that snarky statement is still the first thing I think of when someone mentions Michael Dell: http://news.cnet.com/Dell-Apple-should-close-shop/2100-1001_3-203937.html http://news.cnet.com/Dell-Apple-should-close-shop/2100-1001_... Can't imagine how awkward a meeting between Jobs and Dell would be--at least for Dell.
  - rbanffy 15y ago
    I think both would have a good laugh. Dell was wrong, Jobs not only saved Apple but turned it into one of the largest companies in the planet. Being slightly wrong is boring. Being so completely wrong is fun.
  - rbanffy 15y ago
    I think both would have a good laugh. Dell was wrong, Jobs not only saved Apple but turned it into one of the largest companies in the planet. Being slightly wrong is boring. Being so completely wrong is fun.
  - dennisgorelik 15y ago
    That was fun to read the article AND the comments over last 14 years.
MrHobbes 15y ago
The most valuable publicly traded company anyway. I am quite sure that Saudi Aramco is more valuable than either Exxon or Apple. With that said, it is perhaps unlikely that Apple will be able to maintain its current advantage in the smartphone and tablet markets over the long-term. On the other hand, at a P/E ratio of roughly 14 Apple does not exactly seem to be overvalued at this point in time. Something else to consider is their cash hoard. What exactly do they intend to do with that $28.4 Billion dollars in cash? That is a mystery that I would love to know the answer to. Personally, if I were Apple, I would be supplying investors with a dividend at this point in time. The fact that they are not indicates that they are either stubborn or they believe they are still capable of significant growth. Let's assume they believe they are still capable of significant growth. The cynic in me doubts that this is the case - just because of the significant amount of competitive pressure that they are facing. The optimist in me thinks that it just may be possible for Apple to still expand. Apple's history encourages the optimist in me. Apple is one company that, historically, it has always been a serious mistake to count out. However, how much of this amazing resiliency depends on Apple having Steve Jobs. Well... That's another wildcard. I just don't know. It should be a very interesting next decade for Apple customers, investors, and competitors. This post does not constitute investment advice.
- jmreid 15y ago
  Apple has about $76 billion in cash after the last quarter. Not sure where you got $28.4 billion from. Also, I'm not sure why you say that Apple is unlikely to maintain it's advantage in the smartphone and tablet industry. I'd say they are very likely to maintain an advantage, especially when it comes to profits. No other manufacture has an entire ecosystem in place for it's customers quite like the way Apple does (digital stores, iCloud, Retail stores, etc).
  - ugh 15y ago
    Those $28 billion are excluding long-term marketable securities, the $76 billion include them.
  - MrHobbes 15y ago
    I understand why you may be confused, because this was pretty poorly reported recently and I was not completely specific in my post. Some Miscellaneous References: http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics http://www.apple.com/pr/library/2011/07/19Apple-Reports-Third-Quarter-Results.html http://www.apple.com/pr/library/2011/07/19Apple-Reports-Thir... Apple does not have 76 billion in cash. It has 76 billion in cash, cash-equivalents, and long-term marketable securities. There is a significant difference. For clarification, please see here: http://seekingalpha.com/article/258268-debunking-the-myths-of-apple-s-liquid-assets http://seekingalpha.com/article/258268-debunking-the-myths-o... This post does not constitute investment advice.
BlackJack 15y ago
One day people will learn that price != value. Apple is definitely one of the most valuable companies in the world, but you can't say it's the most valuable because it has the largest market cap - not unless you believe in efficient market theory, but that's a debate for another day :)
- DevX101 15y ago
  Price is the best metric I've ever seen for value. Sure emotion, hype and misinformation can make price diverge from value for a time, but it inevitably converges to value. You have something better?
  - BlackJack 15y ago
    Price is the best metric, but a metric is a standard for measurement, not an accurate measurement. Apple went from $392 a share on April 4th to as low as $353 just before yesterday's close. Are you telling me that apple lost $36 billion in value over a period of 5 days, or that it gained $5 billion in value today? The market is a voting machine in the short term and a weighing machine in the long run. Saying that Apple is now the world's most valuable company is a stupid statement because it's based entirely on today's market cap.
    - Retric 15y ago
      Most people understand that Stock Price relates to current assets AND expected future returns. What most people miss, is that the value of future returns vary's based on the price of other investments. Conciser if 3 year US treasury bonds had a yield of 17% then the value of most stocks would tank as their future earnings become less valuable today. So, when the market crashed the value of Apple stock drops even if their future earnings are unaffected.
- megablast 15y ago
  You are right, we are much better using color rather than price. Apple is the most colorful company in the world. Is there any point in arguing about price and value without suggesting an alternative? This is an old argument.
wiredfool 15y ago
How hard would it be for them to run a graph of the market cap of APPL and XOM throughout the day, rather than the related, but misleading %change throughout the day, which makes it look like they started equal and diverged from there. I know that it's not something that's screen capturable with broswing to finance.google, but a little effort people.
- Perceval 15y ago
  Here's a 5-year chart of market caps for Apple, Exxon-Mobil, and Microsoft: http://ycharts.com/companies/AAPL/market_cap#zoom=5&compCos=XOM,MSFT http://ycharts.com/companies/AAPL/market_cap#zoom=5&comp...
  - bostonvaulter2 15y ago
    Those thin lines make the chart really hard to read.
  - kamechan 15y ago
    even better if you run the chart back to 2002, when apple was hurting. http://ycharts.com/companies/AAPL/market_cap#zoom=&compCos=XOM,MSFT&startDate=9/30/2002&endDate=8/9/2011 http://ycharts.com/companies/AAPL/market_cap#zoom=&compC...
SODaniel 15y ago
Sensational headline now most sensational in the world! Marketwatch.com already listed in HN but with less sensational headline and more accurate content.
kennystone 15y ago
What's amazing is that Apple still managed to grow its profit 125% year over year last quarter. A huge company, hugely profitable, and still hugely growing.
- sliverstorm 15y ago
  I personally figure it's the Apple Tax, aka very comfortable profit margins, plus the short life cycle of technology.
  - sliverstorm 15y ago
    Yeah, you guys are probably right. Apple's profit margins probably don't have much to do with their profitability.
    - Perceval 15y ago
      Unless the margins have grown dramatically, they are unlikely to accounts for Apple's growth this past year. If the margins, high as they are, remain the same, the growth comes from expanding the number of customers they have.

99 points by sahillavingia 15y ago

Wait, Exxon has a P/E of 8.86 that's rediculusly for such a stable company IMO. Am I missing something obvious or is it a great buy right now?

glhaynes 15y ago
Stable, non-growth companies typically have much lower P/Es. There's absolutely no chance that Exxon will double in revenue in the next couple of years; that's entirely possible for Apple.
- rokhayakebe 15y ago
  I agree. Most people are already Exxon customers. Most people aren't Apple customers.
usaar333 15y ago
Exxon's income is highly dependent on the price of oil. See their historical numbers: http://www.google.com/finance?q=NYSE:XOM&fstype=ii http://www.google.com/finance?q=NYSE:XOM&fstype=ii With oil at lower prices ($80/barrel now), their net income can significantly fall.
MrHobbes 15y ago
I haven't had the time to look at the numbers myself recently, but I have heard from some oil industry friends that I know that Exxon is currently in a state of slow-motion liquidation. From what they are saying, exploration and expansion has not really taken a high priority within the company in recent years, and the emphasis seems to be more on maintenance. I don't really know about the extent to which this is true, but if this is the case then it could possibly explain the low p/e ratio. Personally, I think that the problem with Exxon is that it is an oil company and oil prices are connected with world economic outlook. (Most economic activity requires energy, which oil just happens to be a great source of.) World economic outlook is a bit grim right now, so Exxon's outlook is as well. When economic activity heats up again then oil prices will rise, and, at that point, I am quite sure that Exxon will be doing quite well again. This post does not constitute investment advice.

weston 15y ago

They're actually swapping places back and forth, since the market hasn't closed yet (as of 2:54 EST).

thought_alarm 15y ago

Next on the agenda for Apple? Purchase Michael Dell.

A-K 15y ago
Almost fifteen years later, and that snarky statement is still the first thing I think of when someone mentions Michael Dell: http://news.cnet.com/Dell-Apple-should-close-shop/2100-1001_3-203937.html http://news.cnet.com/Dell-Apple-should-close-shop/2100-1001_... Can't imagine how awkward a meeting between Jobs and Dell would be--at least for Dell.
- rbanffy 15y ago
  I think both would have a good laugh. Dell was wrong, Jobs not only saved Apple but turned it into one of the largest companies in the planet. Being slightly wrong is boring. Being so completely wrong is fun.
- rbanffy 15y ago
  I think both would have a good laugh. Dell was wrong, Jobs not only saved Apple but turned it into one of the largest companies in the planet. Being slightly wrong is boring. Being so completely wrong is fun.
- dennisgorelik 15y ago
  That was fun to read the article AND the comments over last 14 years.

MrHobbes 15y ago

The most valuable publicly traded company anyway. I am quite sure that Saudi Aramco is more valuable than either Exxon or Apple. With that said, it is perhaps unlikely that Apple will be able to maintain its current advantage in the smartphone and tablet markets over the long-term. On the other hand, at a P/E ratio of roughly 14 Apple does not exactly seem to be overvalued at this point in time. Something else to consider is their cash hoard. What exactly do they intend to do with that $28.4 Billion dollars in cash? That is a mystery that I would love to know the answer to. Personally, if I were Apple, I would be supplying investors with a dividend at this point in time. The fact that they are not indicates that they are either stubborn or they believe they are still capable of significant growth. Let's assume they believe they are still capable of significant growth. The cynic in me doubts that this is the case - just because of the significant amount of competitive pressure that they are facing. The optimist in me thinks that it just may be possible for Apple to still expand. Apple's history encourages the optimist in me. Apple is one company that, historically, it has always been a serious mistake to count out. However, how much of this amazing resiliency depends on Apple having Steve Jobs. Well... That's another wildcard. I just don't know. It should be a very interesting next decade for Apple customers, investors, and competitors. This post does not constitute investment advice.

jmreid 15y ago
Apple has about $76 billion in cash after the last quarter. Not sure where you got $28.4 billion from. Also, I'm not sure why you say that Apple is unlikely to maintain it's advantage in the smartphone and tablet industry. I'd say they are very likely to maintain an advantage, especially when it comes to profits. No other manufacture has an entire ecosystem in place for it's customers quite like the way Apple does (digital stores, iCloud, Retail stores, etc).
- ugh 15y ago
  Those $28 billion are excluding long-term marketable securities, the $76 billion include them.
- MrHobbes 15y ago
  I understand why you may be confused, because this was pretty poorly reported recently and I was not completely specific in my post. Some Miscellaneous References: http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics http://www.apple.com/pr/library/2011/07/19Apple-Reports-Third-Quarter-Results.html http://www.apple.com/pr/library/2011/07/19Apple-Reports-Thir... Apple does not have 76 billion in cash. It has 76 billion in cash, cash-equivalents, and long-term marketable securities. There is a significant difference. For clarification, please see here: http://seekingalpha.com/article/258268-debunking-the-myths-of-apple-s-liquid-assets http://seekingalpha.com/article/258268-debunking-the-myths-o... This post does not constitute investment advice.

BlackJack 15y ago

One day people will learn that price != value. Apple is definitely one of the most valuable companies in the world, but you can't say it's the most valuable because it has the largest market cap - not unless you believe in efficient market theory, but that's a debate for another day :)

DevX101 15y ago
Price is the best metric I've ever seen for value. Sure emotion, hype and misinformation can make price diverge from value for a time, but it inevitably converges to value. You have something better?
- BlackJack 15y ago
  Price is the best metric, but a metric is a standard for measurement, not an accurate measurement. Apple went from $392 a share on April 4th to as low as $353 just before yesterday's close. Are you telling me that apple lost $36 billion in value over a period of 5 days, or that it gained $5 billion in value today? The market is a voting machine in the short term and a weighing machine in the long run. Saying that Apple is now the world's most valuable company is a stupid statement because it's based entirely on today's market cap.
  - Retric 15y ago
    Most people understand that Stock Price relates to current assets AND expected future returns. What most people miss, is that the value of future returns vary's based on the price of other investments. Conciser if 3 year US treasury bonds had a yield of 17% then the value of most stocks would tank as their future earnings become less valuable today. So, when the market crashed the value of Apple stock drops even if their future earnings are unaffected.
megablast 15y ago
You are right, we are much better using color rather than price. Apple is the most colorful company in the world. Is there any point in arguing about price and value without suggesting an alternative? This is an old argument.

wiredfool 15y ago

How hard would it be for them to run a graph of the market cap of APPL and XOM throughout the day, rather than the related, but misleading %change throughout the day, which makes it look like they started equal and diverged from there. I know that it's not something that's screen capturable with broswing to finance.google, but a little effort people.

Perceval 15y ago
Here's a 5-year chart of market caps for Apple, Exxon-Mobil, and Microsoft: http://ycharts.com/companies/AAPL/market_cap#zoom=5&compCos=XOM,MSFT http://ycharts.com/companies/AAPL/market_cap#zoom=5&comp...
- bostonvaulter2 15y ago
  Those thin lines make the chart really hard to read.
- kamechan 15y ago
  even better if you run the chart back to 2002, when apple was hurting. http://ycharts.com/companies/AAPL/market_cap#zoom=&compCos=XOM,MSFT&startDate=9/30/2002&endDate=8/9/2011 http://ycharts.com/companies/AAPL/market_cap#zoom=&compC...

SODaniel 15y ago

Sensational headline now most sensational in the world! Marketwatch.com already listed in HN but with less sensational headline and more accurate content.

kennystone 15y ago

What's amazing is that Apple still managed to grow its profit 125% year over year last quarter. A huge company, hugely profitable, and still hugely growing.

sliverstorm 15y ago
I personally figure it's the Apple Tax, aka very comfortable profit margins, plus the short life cycle of technology.
- sliverstorm 15y ago
  Yeah, you guys are probably right. Apple's profit margins probably don't have much to do with their profitability.
  - Perceval 15y ago
    Unless the margins have grown dramatically, they are unlikely to accounts for Apple's growth this past year. If the margins, high as they are, remain the same, the growth comes from expanding the number of customers they have.