Analyst: Fire Tim Cook

“Financial services firm BGC Partners on Monday downgraded its rating on Apple stock to ‘sell’ from ‘hold’ and slashed its price target to 85 from 110,” Patrick Seitz reports for Investor’s Business Daily. “The report from BGC analyst Colin Gillis comes a day before Apple is scheduled to report fiscal third-quarter earnings. Wall Street expects Apple to post its second consecutive quarter of declining sales and earnings on a year-over-year basis amid soft iPhone sales.”

“‘Apple has peaked under the leadership of CEO Tim Cook,’ Gillis said in his research report,” Seitz reports. “‘When we ask ourselves ‘Do we see Apple gaining or losing its next $100 billion of value?’, the answer is losing,’ Gillis said. ‘We would rather be too early on this call than too late.'”

“‘With the unfolding dynamic that is the maturation of the smartphone market, Apple has had ample time and resources to build new revenue streams and categories, and the only new category that been delivered by current management in their five years is the watch that still begs for a raison d’etre,’ Gillis said,” Seitz reports. ” Apple has over $200 billion in overseas cash, which is ‘languishing on its balance sheet.’ It could have used that cash to buy ARM Holdings, which SoftBank just acquired for $32 billion. ‘Apple acquiring ARM could make so much sense,’ Gillis said. ‘It’s a high-margin business with future growth, plus there is a national security interest benefit. It positions Apple for the growing IoT (Internet of Things) market. So disappointing! Perhaps management was focused on how to remove headphone jacks.'”

Read more in the full article here.

MacDailyNews Take: Bad analysis. If Apple had purchased ARM, they’d quickly be ARM’s only customer and the rest of the world would quickly work to move on to an independent architecture. They would not settle under Apple’s considerable thumb. Therefore, ARM’s value as a business would cease to exist and there would be no “future growth” for an Apple-owned ARM. A competent analyst would see this clearly.

Additionally, the number of so-called analysts like Gillis who do not understand the value of the Apple Watch is appalling. All you have to do it wear one for a week. We suggest Gillis do so.

The childish and rather clueless jab over “headphone jacks” reveals an underlying bias that colors and greatly weakens the rest of Gillis’ so-called analysis.

We’ve i’Caled Gillis’ commentary for future use.

SEE ALSO:
Apple’s Q416 guidance could be significantly short of expectations – July 26, 2016
What to look for in Apple’s earnings report today – July 26, 2016
Jim Cramer expects ‘not great’ earnings from Apple tomorrow – July 25, 2016
Could Apple surge 10% after earnings tomorrow? – July 25, 2016
Apple is ripe for a rally – July 25, 2016
All eyes on Apple as avalanche of quarterly reports from Silicon Valley begin – July 25, 2016
Apple to release Q316 earnings, webcast live conference call on July 26th – July 22, 2016
MacDailyNews presents live notes from Apple’s Q216 Conference Call – April 26, 2016
Apple reports earnings miss in Q216 – April 26, 2016
MacDailyNews presents live notes from Apple’s Q116 Conference Call – January 26, 2016
Apple reaps $18.4 billion quarterly profit, the largest ever recorded by a single public corporation – January 26, 2016
Apple beats on earnings; sets all-time records for revenue, net income, and EPS – January 26, 2016

37 Comments

  1. Only Apples enemies wish that Tim Cook would be gone. Tim Cook is the genius behind the Apple Production System and the Apple Money Making Machine. He started it when he became COO and now continues to print us money. Analyst who does not understand this must be laughed at and ridiculed to the obscurity.

  2. The problem with the analysts and the Icahns are they apparently have caught the 140 character disease – impatience in the old vernacular. Every radically new product takes a ton of time. The iPhone seemed fast after the iPod touch because it uses a lot of the tech that enabled iPod Touch; iPod touch because it again used tech from Ipod click wheel versions. Each however was a major undertaking. Apple Watch likewise was a major undertaking. The car – huge. Materials, manufacturing, materials, human interfaces, safety etc. Every aspect takes time, some directions lead to dead ends etc. Building staff and facilities. All of it. Apple even under Jobs took time, got the next product to an acceptable introductory state given the then – existing tech limits and etc. A thousands nos for every Yes. Same now as then. Just watch, patiently. If you can.

  3. FTA: “Gillis also noted that Apple’s U.S. cash has been depleted to $24 billion and its debt has increased to $72 billion.”

    That’s because Apple’s board knuckled under to Karl Ichan who railed for years for Apple to get into debt, then sells off his position once they bought back the stock to enrich his position.

  4. I agree. The guy sucks. Remember COMPUTERS Tim???
    He is bringing Apple into the ground quickly. I’ve said for for a long time now. I’ll keep saying it.

    1. tommyr, you do know they are the 12th largest corporation in the world by revenue, don’t you? They’re nowhere near dead. They made more revenue than the other 11 corporations above them. You’d have to be seriously delusional to see Apple as a failure.

      1. I am well aware of that. I didn’t say they were nearly dead nor a failure. Tim Cook has lost focus on Macs. Too much attention to watches and phones. The buying glut on phones and watches can’t last in the long run. The watches from what I’ve read aren’t flying off the shelves either.

  5. Maybe the answer isn’t firing Cook, but is firing several of the execs he has surrounded himself with.. Perhaps the team has gotten old and stale. Maybe the Coach needs new offensive and defensive coordinators? If the current crop is just telling him what they think he wants to hear, it’s a huge problem.

  6. “Financial services firm BGC Partners on Monday downgraded its rating on Apple stock to ‘sell’ from ‘hold’ and slashed its price target to 85 from 110…”

    So, this firm just informed its customers that its guidance has been highly flawed for a long time and that it is incapable of reliably predicting the performance of Apple more than one day ahead. This is simply a window-dressing move to cover their butts if AAPL takes a big dive in the near term. If it doesn’t, then this guidance will eventually (and quietly) be revised upwards and the whole thing forgotten.

    If you are wealthy and can afford dedicated, personal investment support, then it might help. But the general investor lacks sufficient information, insight, and market access to have a reasonable chance of beating the indices over the long term. Even the supposed pros can’t do that. And “free” investment advice from financial companies will seldom help anyone.

  7. Tim should be there, however Apple has to stop giving free rides to Google, Amazon, Facebook, and Netflix. Apple’s stock is where it is because of the combined hot air on the stock market from those companies.

  8. These BGC Klowns were on CNBC after the bell to ‘analyse’ the Apple reporting. Over the years, I’ve watched a LOT of these calls and analysts that shared their interpretation of the reports. This discussion with the ZBGC folks was 1) AWFUL because the folks representing BGC were MORONS, and 2) CNBC clearly brought these BGC Klowns into the discussion to crater the Apple results ON PURPOSE.

    Here ya go BGC AND CNBC…. YOU LOSE ASSKLOWNS.

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