“The more than 50 percent rise in Apple Computer Inc.’s stock price this year has mirrored the brisk sales of its market-leading iPod digital music player and growth at its retail stores,” Duncan Martell reports for Reuters. “In the view of some analysts, the share price’s ascent also reflects a transformation in the way investors are willing to value the Cupertino, California-based company, innovator of the first operating system to make personal computers friendly to everyday users.”
Martell reports, “Once seen as a value play that traded at little above its cash value, Apple’s stock is now attracting long-term and momentum investors sold on Chief Executive Steve Jobs’ vision of the company as a high-margin style-setter at the hub of an emerging ‘digital lifestyle.'”
“‘Longer-term investors are looking at it right now and saying Apple’s got these great products out there and more coming and we trust them,’ said analyst Shannon Cross at Cross Research, while noting that there are now likely a sizable number of momentum investors in Apple,” Martell reports. “‘Part of it is betting on Steve Jobs,’ said technology analyst Tim Bajarin of Creative Strategies, of the stock’s rise. ‘Even though the Mac size of the business has not grown rapidly, he keeps pulling interesting rabbits out of his hat.'”
“While the stock may appear overvalued given its strong performance this year, some investors believe the shares are likely to end the year still higher,” Martell reports. “Jobs agrees. ‘We think that strategy still has a lot of legs,’ Jobs said in a recent interview, referring to the digital lifestyle. ‘If investors are catching up with us, that’s terrific and hopefully they’ll continue to follow us.'”
Full article here.