Stock Analysis: Apple stock surge may tilt it to failure

source:indianexpress.com
The 38-fold surge in Apple shares that drove the iPhone seller past Microsoft market value means the company may be “too big to succeed,” according to research from Rob Arnott.

Research Affiliates LLC found that since 1953, shares of the biggest Standard & Poor’s 500 Index company in an industry trailed the average stock by 2.4% a year in the next decade. The chart shows the market value of Apple, whose stock rallied to $270.17 on Wednesday from $7.17 at the end of 2002, passed Redmond, Washington-based Microsoft’s in May following the introduction of the iPad tablet computer.

Apple, based in Cupertino, California, has increased net income seven straight years, following the release of the iPod music player in 2001 and the iPhone in 2007.

The iPad came out in April, and Apple is forecast to report record profit of $12.4 billion in the fiscal year ending in September, according to the average of 28 analyst estimates in a survey.