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Aug 9, 2011

Apple Becomes the Most Valuable Company in the World

The silver-lining with the current, investor confidence meltdown is that Apple will become the most valuable company in the world - passing Exxon/Mobile. Is this justified?
  • Oil prices are dropping in response to expected weaker demand world-wide. Thus, Exxon's value is falling fast.
  • The less people drive and travel, the more they seek to communicate using digital means.
  • Who wins?
For fundamental investors, consider the following:
  • Growth, who has higher growth potential - Apple or Exxon?
  • Earnings. Contrary to some Wall Street reports, Apple's quarterly earnings are already in the same ballpark as Exxon. What will be the result during the upcoming Christmas season?
  • Risk - Apple is diversifying by region; dependence on any one telecom operator or channel of marketing; mangement; and product line. Exxon depends on oil - PERIOD. Exxon does pay a dividend, but Apple has one of the largest cash balances in the world.
  • Execution - Apple gets it right. Exxon depends on OPEC - which controls its future.
So, which company is worth the most? You decide.

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