Apple (AAPL) unseated Exxon Mobil (XOM) to become the world's most valuable company last August. Since the dethroning, Apple's market capitalization has skyrocketed: It now almost equals all of Exxon plus Google (NASDAQ:GOOG).
(Market capitalization in billions of dollars.)
The iProduct company coins money. Witness how effective Apple is in producing wealth. Apple sells a ton of product, matching Hewlett-Packard (HPQ) and whipping Oracle (ORCL), Cisco (CSCO), Nokia (NOK), and Research in Motion (RIMM) (see chart below).
(Revenue in billions of dollars.)
While sales have been strong, Apple's profits have overwhelmed the tech world. Apple takes the lion's share of the pie when it comes to earnings.
(Yearly earnings in billions of dollars.)
Apple can conquer its competitors because it can charge what it likes for its products. Compare its operating margins to those of its competitors: HP, Research in Motion, Nokia , Lenovo (OTCPK:LNVGF), Toshiba (OTCPK:TOSBF) and Samsung (OTC:SSNLF). Apple commands its markets. Its competitors' small margins look like chump change compared to Apple's high margins . Apple's rivals are forced to eat humble pie.
(Operating margins in percentages.)
Apple shares at a PE of 17.8 are still undervalued and don't reflect the company's widening margins and increased earnings. Investors should buy on any pullback. Apple has $750 written all over it.
Apple is grabbing the pie. Its rivals are left with only a few crumbs. Starving HP, RIM and Nokia investors would be best served trying some more filling Apple pie.
Disclosure: I am long AAPL.
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