How does one build a company as great as Apple? Ask Steve Sorensen. The net worth of some of the biggest companies in the country is what he explores on his blog. Last week, the world’s most recognizable tech company just briefly beached the $800 billion market capitalization threshold, inducing excitement among investors everywhere. Apple shares now appear to be building a base in the $150 price range, with current assets worth $239 billion.
As the first company to reach the $800 billion milestone, Apple looks on track to be the first company to hit $1 trillion in market capitalization, which means its share prices must climb another 30% to hit $200 a share. Fortune Magazine’s annual Fortune 500 list ranked Apple in 3rd place, climbing 2 places from the previous year. Apple posted $233,715 million in revenues, a whopping 28% increase on the back of robust iPhone sales around the world. Bagging some $53,394 million in profits, another incredible 35% profit for Tim Cook and the gang, Apple continues to be the stock that every investor hopes to hold in his portfolio.
Just look at the annualized total returns Apple has delivered to believers: over a five-year period, investors grew their investments by 19.6% while investors were rewarded with a 27.1% gain over a ten-year period. Will the trend continue or has Apple hit a wall as the market continues to show signs of maturity in the smartphone segment? This blogger believes that Steve Jobs’ baby still has room to grow and there’s merit in believing growth prospects aren’t overblown just yet.
First, Apple reportedly maintains a 40% margin on hardware sales. In other words, they’d have to do an incredibly stupid move — much like what their South Korean rival did — to chip away profits, which is highly unlikely. Next, Apple also enjoys excess cash flow, which means it’s far from seeing any kind of financial trouble. In fact, this only leaves room for analysts and investors to speculate on what Apple could use those hundreds of billions in cash for?
All in all, it’s hard to imagine what could have gone on investors’ minds about Steve Jobs’ company almost a decade ago. Ten years back in time, Apple landed at No. 121 on the Fortune 500 list, several hundred and ten notches higher after it plunged to No. 325 five years prior.
Where could Apple be a decade from now? Forecasts are welcomed by Steve Sorensen. Net worth, revenues, and growth are just a few topics he enjoys discussing.