“In an intra-day note to investors, Credit Suisse analyst Kulbinder Garcha said recent checks with Apple’s Asia supply chain revealed weaker iPhone orders than previously forecast, reports Street Insider,” Mikey Campbell reports for AppleInsider. “Following the note’s release, Apple stock prices declined to close at $117.34, down from a $118.73 open.”
“‘In our view, the continued weak supply chain news could weigh on Apple shares for the next few weeks/quarters,'” Garcha writes, adding that unexpectedly low iPhone 6s demand appears to be driving the cuts,” Campbell reports. “Credit Suisse issued a nearly identical report three weeks ago, saying Apple cut supply chain orders on weak iPhone 6s demand.”
Campbell reports, “The investment bank’s Asia team supposedly confirmed a further decrease in orders for November, informing new build estimates of 70 to 75 million units for the December quarter and 45 to 50 million units for the three months following.”
Read more in the full article here.
MacDailyNews Take: We pity anyone who risks their cash in the market without understanding the games that are played on a consistent basis.
Investors should never forget that the sole qualification for becoming a Wall Street analyst is getting hired as a Wall Street analyst.
Like I have explained in the past this is a commission generating note issued by the analyst so as to provide the brokers at Credit Suisse a reason to call their clients to sell/add/buy shares of Apple as the case maybe.
The calls from the brokers to their clients would be something along the following lines:
• To a client that is already long the broker would say, “our analyst just found out some information not yet out on the Street and he says shares will remain weak for weeks and quarters and you should sell yours hares in Apple and buy XYZ instead.”
• To a client that has no position in Apple, the broker would say, “our analyst just made a great call on Apple and the shares are down around $3 per share and I know you have wanted to buy Apple and here is your opportunity. He still has an Outperform on the stock with a $140 price target.”
So, what the analyst did here is come out with a negative note that will get the shares moving, in this case lower (matters not actually) and allow the brokers to call their clients and ask them to buy/add/sell as the case may be.
It’s called an “actionable” research report in the business. — Jay Somaney, Forbes, November 10, 2015
Those who are interested in actually analyzing companies vs. fomenting low-information investor sentiment against them, are those who listen to what Apple’s management tells them:
Even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on. Apple CEO Tim Cook, January 23, 2013
UBS analyst’s latest ‘research’ note on Apple is just another ‘actionable’ note and should be totally ignored – November 16, 2015
Apple shares continue to get slammed on commission/bonus related ‘actionable research’ – November 10, 2015
Apple lower after Credit Suisse notes substantial supply-chain cuts – November 10, 2015