Apple Investors Will Value Company on Cash, Not Stock

Apple Inc. (AAPL) stocks jumped to new highs in after-hours trading yesterday on news the company posted a higher-than-expected profit in its fiscal fourth quarter.

But are investors getting ahead of themselves?

That’s the question observers are asking as Apple’s shares command a “huge premium,” according to MarketWatch. Investors could be setting themselves up for a big shock if they aren’t careful. But at least one financial analyst says that as Apple makes headway in the competitive wireless market, its earnings will keep growing. That will have investors increasingly valuing Apple on a cash-flow basis,” rather than from a stock perspective, MarketWatch reported.

Still, Apple should tread with caution. It’s got large, deep-pocketed rivals, not the least of which is Google Inc. (GOOG).

Apple’s shares were trading for $199.02, a 4.82 percent increase, at 10:12 a.m. Eastern on Tuesday.