Apple’s market value has reached $218 billion and is rising. Due to investor appreciation of Apple’s innovation, rapidly rising revenue and net income, and powerful brand, the price of the firm’s stock is up 110% over the last year.

Apple’s market cap ranks No.3 among stocks traded on US exchanges. It trails only Microsoft (MSFT) at $257 billion and Exxon Mobil (XOM) at $322 billion. Several analysts recently increased their price targets for Apple to more than $300. Apple trades at an all-time high of over $238 a share. If the stock does rise by 26% to $300, the firm’s market cap would be $272  billion. Microsoft’s stock could gain 5% and Apple would still take the No.2 spot in market value.

The case for Apple passing Microsoft is not much of a stretch. Apple’s older products, the Mac and iPod, would have to hold their own in their respective markets. The Mac’s share of the US computer market is about 7%.  Its sales are rising fast enough that it should be able to keep that position. The iPod really has no direct competition and iTunes has such a large share of the online music market that its broad library of content will help the iPod keep its spot among multimedia players.

The iPhone will have to continue to have blistering sales for Apple to continue to do extremely well. The handset is now a third of Apple’s revenue. Most analysts expect over 7 million iPhones to be sold in the current corner and that is without the handset having a strong foothold in large markets such as China. The biggest threat to the iPhone’s success seems to be the emergence of Google (GOOG) Android-powered handsets which have grown rapidly and seem to be taking market share from established operations like RIM (RIMM). Apple will have to show Wall St. that Android is not a significant threat to its smartphone business. Jobs & Co. expect to launch a new version of the iPhone this summer, which should help sales.

The wild card in Apple’s growth is the new iPad. Investors expect it to be a success. Analyst estimates of its sales in the first year after its launch are for five million to ten million units to be shipped. Any number well short of that will cause Wall St. to believe that Apple has lost its amazing touch with consumers. That would almost certainly stop the firm’s stock from advancing.

Apple will announce earnings in about a month. Revenue is expected to above $8 billion. Investors will expect the company to top its own EPS forecasts, which it almost always does. An upside surprise on earnings will almost certainly send Apple’s shares higher.

Apple’s market cap could pass Microsoft’s by the middle of the year.

Douglas A. McIntyre

Macerich Co. (NYSE: MAC) priced a 12 million shares secondary offering at $29.00 per share through Deutsche Bank and J.P. Morgan.  This REIT closed at $29.81 yesterday and is actually trading above $30.00 on the pricing.

Marshall & Ilsley (NYSE: MI) looks like the largest secondary of the day at $782 million raised. The financial services company priced a 136 million share secondary offering at $5.75 per share after a $6.01 close.  Morgan Stanley and Bank of America Merrill Lynch were underwriters here.

Nara Bancorp (NASDAQ: NARA) sold 10 million shares of common stock at $7.50 per share in a deal sold through Keefe Bruyette & Woods.  Shares closed at $8.00 yesterday and are trading around $7.75.

Whitney Holding Corp. (NASDAQ: WTNY) priced a 25 million shares secondary offering at $8.00 per share after closing at $8.30 yesterday. There was a large sales group here from J.P. Morgan and SunTrust Robinson Humphrey as joint book-running managers; co-managers were listed as Keefe Bruyette & Woods and Sandler O’Neill.

Eurand NV (NASDAQ: EURX) is on deck for an 8.5 million shares secondary offering from Deutsche Bank and Bank of America Merrill Lynch, but no formal pricing has been seen.

JON C. OGG
OCTOBER 22, 2009

Allied Defense Group Inc. (ADG) hit a low on an intra-day basis, but it was a strange trade that came right back; could even be a trade break.  Low print was $3.82; close at $4.07; prior range was $3.95 to $8.35.

British American Tobacco plc (NYSE: BTI) fell 3.5% to $43.77; prior 52-week range was $44.96 to $80.65.  Do the Brits not smoke more in a recession? Jolly!

Express Scripts Inc. (NASDAQ: ESRX) down 4.5% at $44.09, low was $44.40 and high was $77.97.  When PBM’s do poorly…

Macerich Co. (NYSE: MAC) fell almost 8% to $5.81 but was as low as $5.64; prior trading range was $5.80 to $76.50.  Ouch, 90% off for the REIT.

United America Indemnity, Ltd (NASDAQ: INDM) down 8% at $3.82; prior range $3.92 to $20.22.

JON C. OGG
March 27, 2009

Here is today’s list on the 52-week lows:

• Allegheny Energy Inc. (NYSE: AYE)
• American Axle & Manufacturing (NYSE: AXL)… gotta love those auto suppliers.
• Atlas Pipeline Partners (NYSE: APL)
• AU Optronics Corp. (NYSE: AUO) hit but didn’t stay under low
• Champion Enterprises (NYSE: CHB) again from yesterday
• Cumulus Media Inc. (NASDAQ: CMLS)
• Great Atlantic Pacific & Tea (NYSE: GAP)… who says food is safe???
• Macerich (NYSE: MAC) downgrade
• Mirant (NYSE: MIR)
• Reliant Energy Inc. (NYSE: RRI)
• Semgroup Energy (NASDAQ: SGLP) battered again after parent woes.
• Safeway Stores Inc. (NYSE: SWY)… who says food is safe???
• Virtusa Corp. (NASDAQ: VRTU) on downgrade

Jon C. Ogg
July 18, 2008

• Best Buy (NYSE: BBY) Cut to Outperform from Top Pick at RBC Capital.
• Coca Cola (NYSE: KO) removed from Goldman Sachs Conviction Buy List.
• EBay (NASDAQ: EBAY) Cut to Neutral from Buy at Goldman Sachs.
• Gilead Sciences (NASDAQ: GILD) Cut to Hold from Buy at Jefferies.
• International Game Technology (NYSE: IGT) Cut to Hold from Buy at Citigroup; Cut to Perform at Oppenheimer.
• Macerich (NYSE: MAC) Cut To Neutral From Buy By Goldman Sachs
• Sunoco (NYSE: SUN) and Tesoro (NYSE: TSO) Cut to Market Perform from Outperform at Bernstein.
• Virtusa (NASDAQ: VRTU) Cut to Neutral from Overweight at JPMorgan.

Jon C. Ogg
July 18, 2008

There is no doubt that this one is a beneficiary of ongoing window dressing and the tech-markup with the other key tech stocks outlined as we enter the end of the year for many fund managers in October.  But even with what we labeled as the "VMWARE CONUNDRUM" because of a low float exaggerating it’s price moves, money managers’ and traders’ demand for stock in the virtualization king seems tireless.

There is no doubt that the company is the leader in virtualization and there is no doubt that the company wants to exceed its targets and will do whatever it can to beat targets.  It has already made itself an acquirer and will likely do so at each new virtualization conference it attends.  But at a closing price of $101.61 what does this stock look like in valuation?

Wall Street has estimates set at $0.65 EPS & $1.27 Billion revenuesfor fiscal December 2007, and has $0.92 EPS and $1.84 Billion revenuesfor fiscal 2008.  With the hype of virtualization and the ever-cheaperprices of multi-core processors and ever-cheaper DRAM prices, you knowthose numbers are probably way too low if you are like myself and muchof Wall Street that believes virtualization is "the next next thing"for the IT sector and investors. So lets pretend that the companymanages 30% better earnings and 20% better growth in revenues using thecurrent expected growth rates.  You’d have nearly  $0.84 EPS and $1.6Billion in revenues for 2007, and then using the same upside surpriseAND the expected growth rates on top of these new hypothetical numbersyou would end up with a magical $1.54 EPS and $2.78 Billion in revenuesfor fiscal 2008.

Forget the 2007 projected P/E ratio of 156right now and the 2008 projected P/E ratio of 110.4.  Use the newmagical "upside surprise" numbers and the new forward P/E ratio is120.95 for 2007 and ‘only’ 66-times for 2008.  These almost becomeacceptable at this point.  But with a roughly a $38.9 Billion marketcap and even with the sustained upside surprise to revenue growthmodels, this would have an implied forward revenue multiple of 24.3 for2007 and 14 for 2008.

At today’s current valuations, it ispossible that VMware stock is trading at anywhere from over 3-times tounder 5-times the sales of the entire virtualization marketindustry-wide to 2010.  These levels aren’t just starting to look likemagic.  They are starting to look like wizardry.  It is even nearlyimpossible to blame traders for using stock options as a "less risky way" of having  exposure to the stock.

This isn’t one of Cramer’s "new four horsemen of tech"but it may be the horse trader.  When you start calculating EMC Corp.’s(NYSE:EMC) 86% ownership valued on paper before flooding the marketwith VMware shares at $33.45 Billion and compare it EMC’s own marketcap of $45.7 Billion, you will begin to scratch your head evenconsidering EMC ran more than 50% since announcing the partial spin-off.  The math starts getting fuzzy.

Keep in mind that with extremely low-float stocks of this sort, logic may not prevail for quite some time yet.  Even after lofty analyst projections,it has continued. Very soon, analysts may have to either boost their targets or make the dreaded "downgrades based upon valuation" calls that would be rather unpopular.  If the company doesn’t vote to allow employees tobreak the lock-up dates early or if EMC doesn’t vote to release Inteland Cisco (and maybe even some of its own VMW shares) early from the180-day lock-up periods, then you could literally see another 4-monthsor more of this.  Stranger things have happened, and in the stockmarket you can still go bankrupt even if your thesis ultimately provestrue.

We are getting ready to release our updated "watch list" of small cap Internet stocks to subscribers of our Special Situation Investing Newsletter,and trials are available.  Our watch list is not all only made ofactive buyout targets today, but under the right circumstances any ofthese could easily become subsidiaries of larger web-based properties.This year alone we have discussed how aQuantive, 24/7 Real Media, and Web.com were acquired off this list;and you can see samples of this.

Jon C. Ogg
October 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

We’ve already gotten the iPhone, we’ve already seen new PC announcements, we’ve already been given the delayed launch date of the Leopard operating system, and we are still viewing the TV initiative as a hobby as Steve Jobs called it himself.  Unless Apple is going to shock the you know what out of everyone with a new unknown and undiscovered product, this iPod revamp makes more than perfect sense.  Consumers want it too.

Back in April, Apple said it had sold its 100-millionth iPod.  This goal is probably to hit 200 million units if it wants to keep driving the stock.  We think this may be more of an iPhone-esque iPod, but without the phone.  So we’d be looking for more touch screen and hopefully some more Wi-Fi features.  We’ll know in a few hours.  Here is what some of our tech friends are saying around the web today:

Business 2.0: wide-screen, touch-sensitive iPod, iPod nano with a larger screen, iPod Shuffle with more memory for the same price….

Engadget: Rick Rubin proclaims "the iPod will be obsolete"
Apple to unleash "The Circle" concept tomorrow?

Newsday.com: What’s coming next from Apple?

CNET: "The iPod is growing up: If Apple really is putting a version of Mac OS X in a new iPod, presumably it has more in mind than showing high-quality reruns of The Hills."

Think Secret: Touch-screen iPod to take center stage

San Francisco Chronicle: What news awaits the Apple faithful?
Speculation centers on redesigned iPods, expanded content offerings on iTunes

After the recent Zune price cuts, you have to wonder if Microsoft (NASDAQ:MSFT) is holding on to this space with looser hands and maybe just as a hobby.  And as far as Creative Tech (NASDAQ:CREAF), everyone now only asks "Who?".

Jon C. Ogg
September 5, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Dell is working with the VMware (NYSE:VMW; t.b.a.) unit of EMC Corp. (NYSE:EMC) for virtualization, along with other partners.  Everyone is getting into the virtualization game it seems.  Imagine when Apple (NASDAQ:AAPL) offers out its operating systems to PC-makers, rather than just Macs allowing virtualization with other PC’s.

PC companies in the past had not been too crazy about virtualization.  But now they either really want to offer virtualization or they just will have to offer it.  With the new dual-core and quad-core processors (and the even greater multi-core offerings down the road) and perpetually lower DRAM costs, this is going to become easier and easier and cheaper and cheaper to offer.  Virtualization is coming on strong, like it or not.

Jon C. Ogg
August 8, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Interestingly enough, it isn’t on sale throughout the entire distribution chain yet.  VMware Fusion is now available online at vmware.com/mac, the Apple Store (apple.com), Amazon.com, Buy.com, Fry’s (frys.com), Microcenter (microcenter.com) and CompUSA (compusa.com). The software will soon be available at Apple’s retail stores and other authorized retailers worldwide.

The software allows Mac users to run both 32- and 64-bit operating systems, leveraging two processor cores at the same time and using a wide variety of USB 2.0 devices. VMware Fusion is also the only Mac virtualization software available today to provide full support for more than 60 operating systems and complete power management capabilities to safeguard virtual machines when laptops are running out of battery.  There have been more than 250,000 downloads of VMware Fusion since the beta became available in December 2006.

Apple (NASDAQ:AAPL) has to be happy about this being available ahead of the new OS launch later this year.  The company has unbelievable upside to market share gains in computer sales, and the more and more that can ‘ease the PC to Mac transition’ can really help Apple out.  If this works incredibly well, this could even migrate more of the business consumer away from "Windows-only" PC environments.  It is still too soon to make that prediction, but it will be interesting to see if this can start bumping those impressive numbers up even more.

Jon C. Ogg
August 6, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.