there was something of a “shake-up” last week on wall-Street relative to Apple and the earthquakes in Japan.
SAN FRANCISCO (Dow Jones) – Apple Inc. (AAPL) got a rare downgrade on Wednesday as a JMP Securities analyst (Alex Guana) pointed to results from the company’s main Asian manufacturing partner that may indicate some relative sales weakness in some of the technology icon’s products.
mid week, on the heels of the turbulence emanating out of Japan, analyst Alex Gauna lowered Apple to a rating of market perform, or neutral, just before the opening bell. I’ll say it right, here, analysts always know just how they can impact a stock, minutely, and, timing is absolutely everything. he made things happen that left the ordinary shareholder defenseless because his information could only be seen by industry drivers.
I freely admit I took this downgrade personally. so, I’m biased. however, my fervent support of Apple, to include a belief in it’s leadership, valuing it’s products, and being an evangelocal shareholder are based on fact, information few people have access to, and a lot of research and keen understanding of the market and all of this affects it. my daughters weddings, and school are hinged on Apples success (mind you, shares would have to drop below $4 for there to be any concern other than the loss of substantial financial wealth). but, there are many, many people out there that take me sersiouly when I say everyone, everyone should own Apple stock. I’ve said it on this blog before, and I’ll say it again… Apple is a $1000 stock, at some point (well inside the next five years). because of my guidance (investors, givers, charities, ministries, etc) around all of that, thousands, possibly hundredes of thousands, of people in far-flung countries, places, simply eat.
so, I take information, and worse, misinformation damn seriously.
that said, I’m going to drop, for only a few minutes, into a lighter mode – and, drag you with me. this life episode, some how, reminded me of the movie Life of Brian, and uttering the word “Jehovah!”.
and, now you see why.
we already have Guana jokes abounding:
there are two kinds of Wall Street analysts: Those that analyze with clarity and understanding, and (the job-hopping) Alex Guanas. the guys at Bank of London are already calling gaffes, “pulling a Guana”.
so… with the stage set, who the hell is this guy? we’ve never heard of him, or his firm before now. yet the market drops its pants despite better guidance from other and leading investment bankers, like Credit Suisse.
NOTE: my sense of fairness has me sharing a detailed interview over this between Matt Phillips at MarketBeat and Guana, himself. don’t simply take my word for anything. you need this information for it’s own perspective. my credibility is always enhanced by the facts. drive your own conclusions, accordingly while reading: Blasphemer!: Meet the Analyst Who Downgraded Apple/ his ultimate point is that some how, some how, what happened in Japan will create reduced demand for the iPad2.
“But we also know how much people love their Apple technology, and it is an admiration we share (ironically Fed Ex just delivered the first of my two iPad 2 orders halfway through our dialog). So it was surprising how thoughtful and respectful the vast majority of our investor interactions were, and how noticeably it differed from past actions of a similar nature. There were only about a dozen hateful or angry calls into our firm that I am aware of. By all accounts it appears our downgrade did not go unnoticed, so I am left to conclude that most found value in the wake up call, and it also suggests to me that AAPL has a high quality and classy investor base.” – Alex Guana
“…classy investor base”?
he says a lot of things in the article. readers will want to buy-into Guana’s “earnest[ness]” (his word). yet, there are still lines wrapping themselves around Apple Stores (and malls) for the iPad2 two weeks after launch. and this guy is arguing that demand has decreased?
fair question #1: “where the hell is the downgrade for all the other supposed Tablet-makers who won’t even get they copycat tablets into the market due to lack of certain piece-part supply?”
I’ve had Santi do the analysis (he sacrificed his first iPad2) to determine what components are used inside the device. he has identified at least five parts that come from Japan: storage and memory from Toshiba Corp. and Elpida Memory Inc., an electronic compass from AKM Semiconductor, touch-screen overlay glass that is likely from Asahi Glass Co. (which did report dmage to several of it’s facilities), and a battery from Apple Japan Inc. (a subsidiary of Apple). several of these companies are clients of ours. most are saying their facilities were not damaged by the earthquake or tsunami. however, they’ll likely be affected, some how, by general logistical problems in Japan, including intermittent electricity and hurdles to transporting raw materials and shipping-out products.
Apple can order some of the components from alternate suppliers. they have some fairly good experience and expertise when it comes to supply, demand and managing that with great margins for profit. this includes Samsung Electronics Co. in South Korea and Micron Technology Inc. in the United States.
the piece I, candidly, don’t have an answer to is questions around glass. iSuppli (analysis firm) said it would be harder to find substitutes for the glass, which it believes is a new type of glass calledHalo Effect“, especially Apple’s Halo Effect) is well documented.
meanwhile, consider the voice of (supplier reason) offered by Eric Savitz from The Tech Trade: Apple Concerns Ease On Component Supply Issues/ do it!
as I prepare to wrap this post up, I’ll remind the collective you that it takes one terrorist to cause a panic. to wit, some of the things Guana said were completely out of context.
if you read the early releases when his firm “dropped the Guana”, there are typos and poor grammar. this indicates hurried activity. that smacks of agenda, and less so careful guidance.
Apple shares dropped almost five percent (5%), or sixteen dollars, ($16) to $329. that’s admittedly a lot of money if converted into share price and valuation. especially in light of the fact Apple’s stock hit three hundred and sixty five dollars ($365) recently. some of the downside was likely the result of the broader market’s latest selloff. but, momentum was carried by panic and greed. possibly evil.
…so Credit Suisse comes back within hours and grades Apple at five hundred dollars ($500).
thanks Credit Suisse something like the U.S. Calvary. go Credit Suisse and $500!
Apple’s share price has no choice but to go there now. mostly because stocks like Apple tend to go back and surpass prior points. that’s just the way it is. and I think that was part of Guana’s thinking.
hacks like Guana don’t make a stand (or, stick their necks out) based on altruism. Guana was possibly “swinging for the fences”. if you read the first article, Guana has jumped around quite a bit with employers I’ve referred to him earlier as a “job-hopper”). As most of you know, I’m involved with one of the top recruiting companies in the world. so, I’m something of a Subject Matter Expert (“SME”) on this topic, as well. you can bet I’ll be monitoring the fall-out of all this with a curiosity to see if Guana and his handlers are polishing their resumes along with Apples.
its likely he took orders from some sinister and shadowy organization, possibly headed by that damn black dog or smoking rabbit and took a bullet. the temporary drop in the stock served no other purpose than to create a buying opportunity for certain powers, and you were, otherwise, powerless.
as obvious as this “play” is, how can the regulators be so clueless if not powerless, themselves?
in other news, Cisco just declared their first ever dividend, finally doing something smart with their cash.
peace be to my Brothers and Sisters.
brian patrick cork