The stock is up a modest 4% since then and still possesses what I think is huge potential for shareholder gains in the coming years.
For starters, its track record of value creation is there. In the past decade, average sales have been up about 17% annually, while annual earnings
have advanced at an even higher rate, close to 23%. This has pushed sales up from less than $23 billion in 2010 to more than $140 billion in 2011. For the coming year, analysts expect another solid increase to $150 billion and earnings per share (EPS)
of roughly $3.30, an incredible increase from only about $0.50 a decade ago.
Another decade of similar growth -- and who knows -- sales could approach $1 trillion. This is quite possible because Petrobras plans to spend more than $224 billion in the next five years to explore for oil and gas in presalt reservoirs off the Brazilian coast. The current price-to-sales multiple for this stock is 1.34, which, if sustained, would push Petrobras' market cap well past the $1 trillion point. 2. Apple (Nasdaq: AAPL)
Business: Technology devices and applications
Market capitalization: $468 billion
Apple is another company that is proving to have one of the most powerful business models in the world. During the past decade, it has revolutionized the music industry (iPod, iTunes), the market for cellular phones (iPhone) and has virtually created the tablet device market with the introduction of the popular iPad.
The proof of its successes is in the numbers. Sales have advanced by 23% annually, or from less than $6 billion 10 years ago to well in excess of $100 billion today. Earnings per share have been up a stellar average of 43% in each of the past 10 years, from $0.05 to more than $30 last year. And growth appears to be accelerating -- the past five years have seen sales jump 35.5% annually and earnings growth of close to 65%.
At this rate, Apple's growth trajectory could push its market cap to $1 trillion in less than five years. This assumes the stock will advance 20% each year during this period. This is quite possible, because the underlying business fundamentals look extremely encouraging.
For starters, Apple's current generation of products continues expanding across the globe. In addition, the company has its sights set on revolutionizing the media market with a TV device as well as the online media storage and retrieval market, through its iCloud service .
The current price-to-sales ratio is 3.7, suggesting sales need to reach $270 billion for the $1 trillion market cap.