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  • Apple's Market Cap Skewing Analytics, Analysts Start Excluding From Data Analysis



    Apple’s 4th quarter earnings report broke records and sent the company’s stock price to another record high closing above $500 for the first time ever with Apple’s market cap reaching close to $500 billion.

    However, Apple’s massive success has had some unforeseen side effects, mainly massive skewing of important market indices like the S&P 500. Since 1957 the S&P has published the prices of 500 large-cap stocks traded on both the New York Stock Exchange or the NASDAQ. The S&P earnings increased 6.6 percent year-over-year during the 4th quarter with Apple’s monster earnings included. Without Apple, the S&P only increased 2.8%.

    Apple’s share of the S&P 500 stands at 3.8% which is greater than Exxon's (3.3%), Microsoft's (1.9%) and IBM’s (1.85%). Apple’s outlier status caused Morgan Stanley, Barclays Capital, Goldman Sachs, Wells Fargo and other institutions to publish market updates excluding Apple.

    Apple has effectively become so large, and recorded earnings so great, that financial institutions are now ignoring the company. Apple’s influence becomes even more apparent when pairing the S&P 500 down to just tech companies. With Apple S&P tech companies had an estimated 21% annual earnings increase. Without Apple, that number shrinks to 5%.

    "What’s happening with Apple is real, because Apple’s earnings are real and any wealth accruing to Apple gets into the hands of U.S. shareholders. But to actually be able to look at trends and look at what’s happening to [other companies], not just the one that’s so exceptional, it is important to strip Apple out." — Barry Knapp of Barclays Capital.
    It isn't often a company performs so well the analysts ignore its performance. Add that to the number of firsts Apple has racked up in the last 10 years.

    Source: 9to5Mac
    This article was originally published in forum thread: Apple's Market Cap Skewing Analytics, Analysts Start Excluding From Data Analysis started by Phillip Swanson View original post
    Comments 6 Comments
    1. shigh's Avatar
      shigh -
      APPLE B1!ch!!!! FTW!!
    1. eZStaR's Avatar
      eZStaR -
      I think it is appropriate to say this. Erm,

      AWWWW YEAHHHHHHH.
    1. Maxime Caudebec's Avatar
      Maxime Caudebec -
      Company started from 1 Garage and blew to this!

      Nice job apple you deserved it
    1. Scotty Manley Silberhorn's Avatar
      Scotty Manley Silberhorn -
      Not really that accurate. I know it is impressive to look at and I love apple and their products. But if you were to realistically take apple out of the picture, you would have to assume that some other tech company would be in it’s place and fill in the gap. It might be slightly lower because apple has done so much innovating. But know one could ever realistically tell us what the market would look like without apple.
    1. Moreno53's Avatar
      Moreno53 -
      Quote Originally Posted by Scotty Manley Silberhorn View Post
      Not really that accurate. I know it is impressive to look at and I love apple and their products. But if you were to realistically take apple out of the picture, you would have to assume that some other tech company would be in it’s place and fill in the gap. It might be slightly lower because apple has done so much innovating. But know one could ever realistically tell us what the market would look like without apple.
      Uh no, thats not how it works.
    1. Scotty Manley Silberhorn's Avatar
      Scotty Manley Silberhorn -
      Quote Originally Posted by Moreno53 View Post
      Uh no, thats not how it works.
      So you’re saying that Apple never existed, we would just have this massive hole missing from technology all of these years? No, someone else would’ve made up for it. Like I stated we might not be as advanced as we are now, but some company would make up the hole that apple fills now. That’s how it works. Other company’s do well when others fail.