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    Apple stock breaks $500 level, continuing rally

    NEW YORK (AP) — Apple's stock broke above $500 for the first time Monday. It was the latest step in a rally that began more than two weeks ago, when the company reported staggering sales and profits for the holiday quarter.

    The shares hit $503.83 soon after opening, before subsiding to $502.60 in after-hours trading. That was up $9.18, or 1.9 percent, from Friday's close.

    Apple Inc. and Exxon Mobil Corp. have been vying for the position as most valuable company in the world since last summer, but the latest rally has made the gadget maker 17 percent more valuable than the oil company. Its market capitalization is now $465 billion, compared to Exxon's $400 billion.

    On Jan. 24, Apple posted net income of $13.06 billion for the quarter that ended in December, more than doubling its profits from the year before. Sales were $46.3 billion, up 73 percent from a year ago.

    Even before it posted blow-out results, Wall Street analysts had pointed to a big gap between Apple's share price and its earnings. By common methods of valuation that compare a stock price to earnings and earnings growth, the stock should be worth much more.

    The average target price of Apple shares given by 37 analysts who have updated their ratings since the Jan. 24 report is $588, according to FactSet data.

    Analysts say the company's policy of keeping its cash rather than paying a dividend has been hurting the stock. Value-oriented funds are often forbidden from investing in companies that don't pay a dividend, and growth-focused funds are often tapped out — they're heavily invested in Apple already, and likely don't want to increase their holdings.

    However, company watchers expect Apple to start paying a dividend this year. On a conference call after the earnings report, chief financial officer Peter Oppenheimer said the board was in "active" discussions about the company's use of cash.

    Apple looks set to launch sequels in its hit iPhone and iPad franchises this year. There's also speculation that it will move into the TV market.

     

    26 comments

    • Charly B  •  3 mths ago
      Well why Wouldn't it grow? Since apple outsourced all the assembly jobs to china,where labor is practically slave cost! Build dirt cheap ! Sell for a 700% mark up! On something that will obsolete in a year!
      • A Yahoo! User 3 mths ago
        Apple's margins are around 26%, not 700% and they never made a product that was obsolete in a year. Do you have to lie to make a point? Not much of a point, in that case.
      • RS 3 mths ago
        Obsolete is a matter of opinion James. I have an iMac that's old as the hills, but I know people who want a new "whatever" the minute it comes out because it will so so many more "wonderful" things.
      • TiredRetired 3 mths ago
        I think the people that wait in line for days to replace a perfectly good working iphone for the latest and greatest are making Charly #$%$ case for him.
    • Don Gato  •  3 mths ago
      Apple the biggest company in China.
    • T v  •  Hicksville, New York  •  3 mths ago
      How big can they grow?
    • Bushcheney  •  3 mths ago
      It will be interesting to see how much pressure Apple will have to pull manufacturing out of china in light of labor, iPad naming, technology theft, competition, etc, vs. super high profits.
      • Don Gato 3 mths ago
        The jobs will just move to Mexico. Steve Jobs told Obama, "The jobs are not coming back to America."
    • John  •  3 mths ago
      When I went all in and bought at $82 a couple years ago, people thought I was crazy and said the stocks were wayyy overpriced. Of course they kept saying that at $200, $300, and $400. Guess we'll see how much my thousand shares will be worth in 30 years when I retire!
      • Jeff 3 mths ago
        Congrats man! I agree. I have a few less shares than you, but not quite as low as your purchase price. The haters can hate all they want, but the fact is, it's still under priced. They'll continue to annihilate earnings and gain market share with their iPhone, iPad, & Macs.
    • Mike Jimenez  •  Chicago, Illinois  •  3 mths ago
      How do you get here?... a true successful and inspiring company that has served as a company model to us all and has become part of history. Congratulations Apple!
    • Bob Ranger  •  3 mths ago
      It's stock is not worth $500 per share (except by market value, of course). Do I smell a bubble about to burst??
      • Milo Minderbinder 3 mths ago
        No, it's not a bubble. Take a look at the multiples. If you don't know what I am talking about, then you should probably not have made the comment in the first place.
      • RS 3 mths ago
        I'm just bummed I passed on the stock years ago when it was $11.75 per share!
      • PDX2010 3 mths ago
        No you don't. You're just bitter you didn't buy in 20 years ago. Your pathetically transparent.
    • Bradley Bonkoski  •  3 mths ago
      Awesome.. this means more jobs.. in China
    • MarkyMark  •  3 mths ago
      Easy to make money when 12 year olds will work for $1 an hour with no health insurance.
    • Charly B  •  3 mths ago
      An American becon of light ! Made in china! We can buy them but we can't build them!
      A true American Steve "gives it to the chinnese " jobs !
    • DCL  •  3 mths ago
      I'm a happy investor. I bought over two years ago. Wish I had bought sooner.
    • William S  •  Las Vegas, Nevada  •  3 mths ago
      Chinese slave labor really pays good dividends!
    • Marvin Martian  •  3 mths ago
      Slave labor = huge profits.
    • PDX2010  •  3 mths ago
      Okay, if your are leaving some trite, snarky, economically ill informed comment referring to Apple building products abroad. . . PLEASE! PLEASE! PLEASE! Leave a comment listing ONE computer, smartphone, or tablet made in the USA by ANY manufacturer. Go ahead, do it. Seriously, go ahead, list ONE.
    • Groucho Marxist  •  3 mths ago
      Had I not resigned from Apple 12 years ago, I'd be a multi-millionaire at today's stock prices. But 10 years of 100-hour workweeks might've killed me sooner than Steve Jobs. Those who stuck it out deserve their reward; I just hope they've kept their health.
    • Petrushka  •  Marco Island, Florida  •  3 mths ago
      Apple breaks the $500 level while breaking the backs of its workers in China. They make everything by hand and chemicals they use are neurotoxins.. They work 70-100 hours per week and when they can work no more they are discarded.
      I sure love my Apple Mac Book Pro!
      These products could be made in the USA but they would cost more and money is the name of the game.
    • LW  •  3 mths ago
      It may be high now, but the second they miss a revenue projection or fail to show insane growth from one quarter to the next investors will sell to take their profits.
    • Jim  •  3 mths ago
      That Mountain of Cash Apple is holding is STOLEN FROM THE CHINESE KIDS WHO BUILD APPLE’S iCrap !!! (See related stories about working conditions in China today!!!)

      So, you see, BEHIND EVERY GREAT FORTUNE, IS A CRIME !!!

      But of course, the Capitalists believe that they “Stole it –FAIR AND SQUARE” !!!

      Apple are NOTHING BUT INTERNATIONAL CHILD MOLESTERS !!!
    • RS  •  3 mths ago
      Yep. I own an iMac (built years and years ago in the US) and a year ago got an iPhone, which sucks. NO more Apple purchases for me, but then they ALL MAKE THEIR COMPUTERS IN CHINA and Taiwan.
    • !  •  Mt Hamilton, California  •  3 mths ago
      Overpriced piece of #$%$
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