Apple Briefly Ranked as Most Valuable Company in the World

[Eric-PTEK]

I'm not sure I understand your "metric" and I don't think many people do, either. Apple is profitable, and we can leave the "big" or "small" determinations based on total number of employees. What you consider as "fodder" (Apple store employees) also enables Apple to have unparalleled retail reach which is key to their strategy & sales, which makes them profitable.

I'm not sure I follow what your point is, maybe you can clarify it for us.

What makes a company valuable?

1. Physical Assets, plants, trucks for shipping, warehouses, etc...
2. Intellectual assets, smart people, patents, licensing agreements
3. Cash/liquid assets

Apple is strongest in 2/3. I bet their physical footprint is at the bottom for companies of similar market cap except for Google.

Their intellectual assets make them big, but the Apple Store is a model and its meant to shove anyone into that model and see if they work. I've been in a lot of Apple stores on regular basis, their turn over is decent. Apple store employee's are not an intellectual asset, the program and model may be, but not the employee's.

Take the Apple store employee's out of the mix and what do you have left? A strong intellectual core and a lot of cash with not much in the way of physical assets.

I'm not saying its bad, in fact its very smart, but for the purposes of comparison they are a small company.

 

[50548]

AAPL shareholder here. The stock is undervalued, if anything. The company is growing like crazy, yet its P/E sits in line with flatlined companies like Microsoft. Look at Amazon's P/E. Or Netflix. Now those are overvalued stocks.

I recently read an analysis that stated that Apple would have as much cash on hand as the entire company is currently worth in a matter of 3 years or so. And I believe that was projected at zero growth, which we know will not be the case.

I would like to see an AAPL split to remove the psychological perception that it's overpriced when the facts show that it is not.

I'm hanging on to my AAPL and not letting go.

As reported elsewhere, in fact Apple's current P/E ratio is even lower than at the height of the crisis in 2008...if anything, this should be a "buy" opportunity. Too bad I didn't buy their stock back in the mid-90s...

 

[the8thark]

While market cap is a fun stat and the run-up by Apple is certainly impressive, it certainly isn't the "end-all be-all" statistic. Apple has about $90b in cash. If they were to decide to give half of that back in a special dividend the market cap of Apple would instantly go down by over 10%. To be fair I have no idea how much cash XOM has but regardless, market cap really isn't the statistic to be used to measure a company's size. Revenues are a better metric IMHO.

Revenues stink as a metric to judge a company. A company can have high revenues but even higher expenses and make a loss for the year. So by your statistic a company in the red (but with high revenues) can be better then one that is in the black (but smaller revenues).

Apple is prime proof, you don't need high revenues to get high profits and a high market share. Actually I'd like to see the companies based on a profits/revenue earnt ratio.

 

[Sjhonny]

Wow,

Good job Apple.

Wonder what's going to happen then Lord Jobs leaves

For what? Not losing as much in stock value as the highest publicly traded company?

 

[Cartaphilus]

Food for thought:

What do you believe one is supposed to think after digesting this chart?

The debate over what constitutes a "valuable" company is a a longstanding one, and, like other longstanding dorm room controversies eventually comes down to a matter of taste. Some people value companies with armies of employees, while others see a higher value for companies with a higher level of profit per employee, or a high ratio of profit to employee costs. There are those who value a company as a function of its expected growth rate, others who focus more on the health of a balance sheet, and those who concentrate on free cash flow over time. Each group of investors has its own basket of criteria, and when added to the inevitable uncertainty about the facts and future facts pertaining to each faction's criteria, it makes for a robust open market.

If we all agreed on what makes one company more or less valuable than another, finance would be a far less interesting subject.

Nonetheless, I think we can all agree that Apple has created extraordinary value by successfully designing and marketing products and services that many consumers adore, and that the company's management, employees, and stockholders are certainly entitled to the fruits of their success.

 

[Anonymous Freak]

[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]

Update x2: At 4PM Eastern, the end of the trading day, ExxonMobil closed at $71.64 with a market cap of $348.32 billion. Apple closed at $374.01, valued at $346.74 billion, some $600 million behind XOM.

Article Link: Apple Briefly Ranked as Most Valuable Company in the World

I'm not sure where you learned your math, but 348.32 billion minus 346.74 billion does not equal 600 million, it equals 1.58 billion.

 

[Speedy2]

I read they have 49k employee's, most of them are probably in the retail outfits and in corporate terms they are fodder. The real value employee's who create, design, and market Apple products is small.

How else do your think such a 'small' company gained such a large market cap on 'small' sales?

If you added up Apple's physical value outside of the patents they hold they are extremely small.

By that logic, Wal-Mart is a small company too. They have a large number of employees, but they couldn't be more what you call "fodder". The company doesn't manufacture anything, and it doesn't have much of a physical value (I highly doubt they really own many of their stores).

 

[Sjhonny]

Revenues stink as a metric to judge a company. A company can have high revenues but even higher expenses and make a loss for the year. So by your statistic a company in the red (but with high revenues) can be better then one that is in the black (but smaller revenues).

Apple is prime proof, you don't need high revenues to get high profits and a high market share. Actually I'd like to see the companies based on a profits/revenue earnt ratio.

No, but you need high revenue, to be a big company! Besides, there are multiple companies that have trillions in assets. Apple is, by far, not one of them. There are probably even more companies of which the general public doesn't knows it's asset because they simply never gave out public shares.

 

[clibinarius]

Food for thought:

Food for thought: IBM hires all sorts of industrial workers. Apple hires retail employees. No matter where you are, an industrial job is higher quality on average than retail.

Apple makes that money by efficient design, vertical integration, outsourcing, and not paying too many people middle class salaries.

No matter how you slice it, Apple is what's wrong with America, and celebrating this kind of success is like celebrating the guilded age. It might be a good product, but its just evil-the lack of investment that Apple puts into the US as well as all of its other big markets.

Go ahead, say obvious troll is a troll. I like my Apple products but really think the company is evil. The only reason I'd buy the iPhone by this point isn't due to the fact that iOS is better than Android (Newsflash: They're comparable, and given the fact I'm computer literate, Android-like Linux (and Windows for that matter) compared to OSX is probably more useful to me than iOS), as much as Google is an evil company in itself and the makers of Android phones aren't particularly "nicer" than Apple.

But I will say this about Samsung, who most people bash on these forums: At least they invest in Korea out of necessity. Would love to see Apple do that here. Or at least educate me on how they do.

Oh, and as far as Exxon being less valuable than Apple: If you do what Apple does, what would Exxon's market cap be? I mean, not pay dividends? And don't forget, Exxon pays a lot more money due to regulations, R&D ("Exploration") and pays many upper middle class salaries in the US. If you took every Exxon dividend over the entire time Apple's existed and added it to the price of the stock-accounting for inflation-what then would Exxon's Market Cap be? My instinct is...much higher than Apple's by far.

 

[Apple Corps]

Good for Apple, but they are way over-valued if you ask me.

They are actually quite UNDERVALUED.

 

[FrozenTomato]

Apple is so efficiently run and operates a tight ship despite having $77 Billion cash and ZERO debt.

 

[koruki]

lol give it another couple days for Apple to latch on securely. Else iPhone 5 will secure it for them, either way I see it being #1 before 2011 is up

 

[Apple Corps]

Food for thought: IBM hires all sorts of industrial workers. Apple hires retail employees. No matter where you are, an industrial job is higher quality on average than retail.

Apple makes that money by efficient design, vertical integration, outsourcing, and not paying too many people middle class salaries.

No matter how you slice it, Apple is what's wrong with America, and celebrating this kind of success is like celebrating the guilded age. It might be a good product, but its just evil-the lack of investment that Apple puts into the US as well as all of its other big markets.

Go ahead, say obvious troll is a troll. I like my Apple products but really think the company is evil. The only reason I'd buy the iPhone by this point isn't due to the fact that iOS is better than Android (Newsflash: They're comparable, and given the fact I'm computer literate, Android-like Linux (and Windows for that matter) compared to OSX is probably more useful to me than iOS), as much as Google is an evil company in itself and the makers of Android phones aren't particularly "nicer" than Apple.

But I will say this about Samsung, who most people bash on these forums: At least they invest in Korea out of necessity. Would love to see Apple do that here. Or at least educate me on how they do.

Oh, and as far as Exxon being less valuable than Apple: If you do what Apple does, what would Exxon's market cap be? I mean, not pay dividends? And don't forget, Exxon pays a lot more money due to regulations, R&D ("Exploration") and pays many upper middle class salaries in the US. If you took every Exxon dividend over the entire time Apple's existed and added it to the price of the stock-accounting for inflation-what then would Exxon's Market Cap be? My instinct is...much higher than Apple's by far.

You clearly do not understand the concept of capitalism and ROI to SHAREHOLDERS - Apple's role - beyond putting a dent in the universe - is financial results that benefit the people that own it - shareholders. They do an incredible job at that.

 

[Papajohn56]

This is a misnomer - the world's most valuable company that's publicly traded.

Saudi Aramco is worth over $2 Trillion.

 

[Papajohn56]

You clearly do not understand the concept of capitalism and ROI to SHAREHOLDERS - Apple's role - beyond putting a dent in the universe - is financial results that benefit the people that own it - shareholders. They do an incredible job at that.

Except they don't pay dividends, which is starting to irk shareholders.

 

[fly75]

Food for thought: IBM hires all sorts of industrial workers. Apple hires retail employees. No matter where you are, an industrial job is higher quality on average than retail.

Apple makes that money by efficient design, vertical integration, outsourcing, and not paying too many people middle class salaries.

No matter how you slice it, Apple is what's wrong with America, and celebrating this kind of success is like celebrating the guilded age. It might be a good product, but its just evil-the lack of investment that Apple puts into the US as well as all of its other big markets.

IBM is hiring all sorts of foreign workers and mostly in IT services, not manufacturing. IBM US headcount was approaching 100K in 2009 when IBM decided to stop publishing the figure.

Not exactly the paragon of industrial jobs you project it to be.

 

[davidgrimm]

Oil is used to make many of the soft and hard plastics we all enjoy today. So no oil equals so plastic.

There was life and things before plastics. And if we had to stop using plastics, there will still be things in the future. Plastics just made things more affordable to make and own.

Apple on the other hand enriches so many people's lives with their products.

So you can live without oil and Apple products. But our lives are so much the better with them.

Agreed completely.

 

[farmboy]

I'm happy for Apple but in my opinion, I think they've to a certain degree let all this success go to their head. There are many examples and Blu-ray (again, IMO) is as valid as any so really, why try to degrade another mans post. Honestly, you need to get over yourself...and +1 on wanting an OPTION for Blu-ray.

Hmm. Apple's thought process may be: "We have a ton of money so let's not invest any in Blu-ray licensing fees, just to screw with some customers."

Or, more likely: "We have a ton of money by selling machines that don't play Blu-ray and sometimes not even Flash, and nobody cares because both of them are problematic EOL technologies."

I'm thinking it's more the latter. Three years ago I might have wondered if it was the right decision, but now it's just time to move on.

 

[Jerome Morrow]

Do we win now? Lol...

So, what next Stevie? World domination?

 

[*LTD*]

This is a misnomer - the world's most valuable company that's publicly traded.

Saudi Aramco is worth over $2 Trillion.

Mind-boggling, to say the least. All of Saudi lives off oil money - it's one massive welfare state.

 

[farmboy]

Except they don't pay dividends, which is starting to irk shareholders.

Not many, I'd wager.

 

[clibinarius]

You clearly do not understand the concept of capitalism and ROI to SHAREHOLDERS - Apple's role - beyond putting a dent in the universe - is financial results that benefit the people that own it - shareholders. They do an incredible job at that.

I understand that. And in my opinion the way they do it is evil, even if perfectly legal. You do not understand the concept of morality. It exists in capitalism too. If a company is deemed sufficiently immoral, it is usually choked to death by a government in the end.

Now Apple certainly isn't that evil, at least, I don't think so. And since they have no monopoly the consumer can walk.

But I'm glad to see that you don't care about morality at all. Shareholders best interest is to also see people can buy their products. In the current economy, Worldwide demand for high margin goods like Apple will decline: That means lower margins, less R&D and (eventually), fewer profits. So it is generally in long term shareholders interest to see a company like Apple be seen as good for America and not a leech. Right now Apple is "Cool" but I don't see how that can last aside from the fact Microsoft and Google aren't any better in these regards (Well, Microsoft pays a dividend and its execs tend to give more to charity, actually...)

As far as the other comment about IBM trimming jobs and outsourcing them: They're hiring engineers in other countries. That's still better in India than working retail.

 

[acies]

Market Cap vs. Enterprise Value

While it's nice to tout how big a company's Market Cap is, in the finance world that's rarely looked at as the "value of the company". The difference:

Market Cap (commonly known as "Equity Value") -- takes into account only the value of the company's equity, not the overall value of the company were you to attempt to go out and buy it.

Enterprise Value (EV) -- is a measure of the complete value of a company, thought of as "What would you have to pay to buy the whole company?" The (simplified) difference between the two is EV = Market Cap + Total Debt - Excess Cash.

The difference can therefore be quite significant, such as in Apple's case with their huge cash reserve. So when you try to "value" them and a company like Exxon... you get wildly different valuations (using yahoo):

Apple (AAPL)
Market Cap: $347B
Enterprise Value: $299B

Exxon (XOM)
Market Cap: $353B
Enterprise Value: $348B​

Which shows that while Apple is certainly growing like a weed -- and an enormous company -- it still has quite a way to go to have a higher valuation than the likes of Exxon.

Interesting to note the world's most valuable company GE is still huge by comparison. General Electric: $545B

 

[Papajohn56]

Not many, I'd wager.

Vanguard and JP Morgan have questioned apple on this, and they own something like 6-10% of Apple's stock.

 

[Papajohn56]

I understand that. And in my opinion the way they do it is evil, even if perfectly legal. You do not understand the concept of morality. It exists in capitalism too. If a company is deemed sufficiently immoral, it is usually choked to death by a government in the end.

Now Apple certainly isn't that evil, at least, I don't think so. And since they have no monopoly the consumer can walk.

But I'm glad to see that you don't care about morality at all. Shareholders best interest is to also see people can buy their products. In the current economy, Worldwide demand for high margin goods like Apple will decline: That means lower margins, less R&D and (eventually), fewer profits. So it is generally in long term shareholders interest to see a company like Apple be seen as good for America and not a leech. Right now Apple is "Cool" but I don't see how that can last aside from the fact Microsoft and Google aren't any better in these regards (Well, Microsoft pays a dividend and its execs tend to give more to charity, actually...)

As far as the other comment about IBM trimming jobs and outsourcing them: They're hiring engineers in other countries. That's still better in India than working retail.

You're working in moral relativism, first off. You also don't know what Apple's major execs donate to charity in their private lives - just because one doesn't publicize this info, doesn't mean they don't do it. Not everyone wants attention for their giving.

Who are you to declare what morality is? And why should Government be the ultimate arbiter of what is or isn't moral?