AmTech's Wu pulls 180, reinstates Buy rating on Apple shares

Posted:
in General Discussion edited January 2014
Less than two weeks after cutting his rating on Apple shares to Neutral, American Technology Research analyst Shaw Wu on Monday said he's taking a step-back, reinstating his Buy rating, and revisiting his long-term thesis for the multi-faceted electronics maker.



"We overestimated the potential negative reaction on the quarter and in hindsight should have moderated our near-term posture rather than downgrading," the analyst conceded in a note to clients. "While Apple shares will likely remain volatile and may offer a better entry point, we need to align our rating with our longer term view on fundamentals."



Although Wu maintains that "a potential product vacuum and draw-down in inventory" are likely during the current quarter, he now believes investors are routinely aware of those circumstances and have since looked past them in anticipation of new product launches during the second half of the calendar year.



Among those product launches, the analyst said, is 3G iPhone transition in the June/July timeframe, and a complete overhaul of the company's mainstream notebook offerings during the September quarter.



Echoing details from a report originally published by AppleInsider last month, Wu cited his own sources in saying that both the MacBook and MacBook Pro would see a major redesign with styling to match new iMac and MacBook Air.



"While MacBook and MacBook Pro have done well, there has not been a form factor refresh since 2001-2002," he wrote.



As a result, Wu upgraded shares of Apple to Buy from Neutral and instated a new 6-12 month price target of $210 per share (up from $175).



"Considering our bullishness on the macro trends [...] and assuming great management execution continues, Apple has earnings power significantly beyond consensus estimates," he added. "We think calendar year 2009 earnings is more likely closer to $7.50-8.00 than the $6.59 consensus estimate."
«1

Comments

  • Reply 1 of 33
    SpamSandwichSpamSandwich Posts: 31,125member
    More tap dancing and double-talk from Wu.
  • Reply 2 of 33
    lafelafe Posts: 252member
    Wu says "Buy". That means "sell", right?
  • Reply 3 of 33
    Quote:
    Originally Posted by Lafe View Post


    Wu says "Buy". That means "sell", right?



    Yes, or so a Senior Apple Vice President thinks:

    http://www.forbes.com/feeds/ap/2008/...ap4960808.html



    Have we seen the peak of Apple stock price?



    I assume it will find its proper value in the coming months.
  • Reply 4 of 33
    minderbinderminderbinder Posts: 1,703member
    Could this guy be any more clueless?



    He has showed the world that his strategy is literally buy high, sell low.
  • Reply 5 of 33
    kasperkasper Posts: 941member, administrator
    Quote:
    Originally Posted by DigitalChan View Post


    Yes, or so a Senior Apple Vice President thinks:

    http://www.forbes.com/feeds/ap/2008/...ap4960808.html



    Have we seen the peak of Apple stock price?



    I assume it will find its proper value in the coming months.



    Well, that was a pre-arranged trade on the part of Schiller...



    Best,



    K
  • Reply 6 of 33
    hirohiro Posts: 2,663member
    Quote:
    Originally Posted by Lafe View Post


    Wu says "Buy". That means "sell", right?



    Naw. It just means his broker clients were pissed because his recommendation was lowering their ability to churn. So he has to change to open that aspect back up again.
  • Reply 7 of 33
    SpamSandwichSpamSandwich Posts: 31,125member
    Quote:
    Originally Posted by DigitalChan View Post


    Have we seen the peak of Apple stock price?



    I assume it will find its proper value in the coming months.



    That would be a very naive assumption. Apple is only finding their footing with the iPhone in the international markets and there's a lot of room for growth at this early, early stage.
  • Reply 8 of 33
    bageljoeybageljoey Posts: 1,755member
    Quote:
    Originally Posted by minderbinder View Post


    Could this guy be any more clueless?



    He has showed the world that his strategy is literally buy high, sell low.



    Exactly.

    Appl has gone up, what, 20-25 dollars since he said not to buy?

    And even in reinstating his "buy" he also says well, it is probably going to drop in the near term. This is an odd mess of mixed messages he is sending out.



    On the bright side, one of his lines of thought is bound to be right...
  • Reply 9 of 33
    andyzakyandyzaky Posts: 72member
    Shaw Wu Downgrade Reminiscent of Stock Manipulation

    Tuesday, April 22, 2008

    http://bullcross.blogspot.com/2008/0...-of-stock.html



    Shares of Apple, Inc. (Nasdaq: AAPL) tumbled more than 5.00% or $9.00 this morning on the NASDAQ stock exchange when AmTech analyst Shaw Wu cut his rating on shares of Apple from Buy to Neutral. As the guiding reasoning for the downgrade, Shaw Wu claims "We are concerned that expectations may be too high with the stock rebounding over 45 percent in recent weeks," the analyst told clients. "While we believe Apple will report a strong quarter relative to guidance and published consensus estimates, we are concerned whether it will be good enough and whether investors will be as forgiving with conservative guidance."



    Really? Well, Mr. Wu, why don't you give the investor a chance to make their own decisions instead of making their decisions for them one day before earnings? By downgrading Apple one day before earnings, Shaw Wu has all but triggered a pre-earnings sell-off, thus making it difficult for Apple to make any meaningful move to the upside when it reports tomorrow afternoon. Shaw Wu knows all too well what happens when an analyst downgrades Apple. He knew or should have known that Apple would fall precipitously on the downgrade. What is more, he knew or should have known that Apple would fall more than usual when downgraded just one day before earnings. He know or should have known that stocks tends to be at the precipice of a huge move in and around earnings. Thus, I wonder, what is Shaw Wu's real motivation with his downgrade this morning? Is it because his $175 price target was, like other analysts targets, about to be obliterated as too low? Or perhaps he wanted to allow certain key investors one last opportunity to get into the stock before it makes a huge move in the future. Whatever the reason, his motivation should at least be called into question.



    Shaw Wu's actions are clearly suggestive of stock manipulation. And this isn't the first time Mr. Wu of AmTech has conducted himself in the practice of mindlessly bashing the stock for no legally viable reason. In June-July of 2006, Shaw Wu's actions were so abhorrent, that he has lost a lot of credibility in my eyes. His financial analysis is good at times, but for the most part, he is a worthless analyst with nothing meaningful to contribute from a financial perspective. In April of 2006, Apple reached a high of $73.80 after it reported solid second quarter earnings. Yet, shortly after the earnings report, everything fell apart and quickly. Apple fell from $73.80 in April to $50.00 in July. Part of this had to do with Fed Chief Ben Bernanke telling Maria Bartaromo of CNBC that he didn't want investors to think we was done raising interest rates and part of the sell off had to do with the market predicting a recession that never happened. Yet, notwithstanding the market sentiments during the period, much of the sell-off was due to an orchestrated bashing led by none other than Shaw Wu of AmTech.



    Shaw Wu started a baseless rumor that Apple was expected to release a new iPod Nano in August. He claimed that the street consensus was for an iPod relase in August when no one on the street was expecting such a release. What I don't quite understand is how one can get away with claiming that "the street" has a consensus estimate for when a product will be released, when no on "the street" shares that view? Both conventional wisdom and sensible analysis indicated that Apple would release the new 2G iPod Nano in September when Apple usually releases such refreshes. Yet, Shaw Wu built up a straw man that Apple was expected to release the Nano in August and then knocked down that straw man by saying that Apple has delayed its release. Every time Shaw Wu released an "updated note" on the Nano delay controversy, the stock price fell significantly. I know. I was there.



    On June 15, 2006, Shaw Wu said in a research note to clients, "We are seeing weaker iPod nano shipments offset by strength in video iPods and iPod shuffles. We continue to believe the iPod nano is in need of a refresh and will likely see one in the September quarter." Notice how Shaw Wu holds the general view that the iPod Nano will be released in the September quarter. He is clever in saying the words "September quarter" instead of saying the month of September. Just two weeks later, when the market started selling off, Shaw Wu writes another note where he argues that the iPod Nano has been delayed for a quarter or two. This is where the rumor mongering begins. He also cut his price on shares of Apple from $101 to $75 that day. When Apple was down, Shaw Wu kicked Apple in the face.



    On July 10, 2006, Shaw Wu all of sudden, and for no good reason, claims that the street's consensus view for a new iPod Nano was for the July-August time frame when no one on the street shared that view. Appleinsider notes, "In a research note released to clients on Monday morning, American Technology Research analyst Shaw Wu maintained his stance that the new iPod nano -- which he has dubbed the "mini video iPod" -- will miss the Street's consensus view of a July or August introduction." Give me a break! Shaw Wu writes two separate research notes on a largely unconfirmed and insignificant iPod Nano delay within a 2-week period. For those who were invested in Apple in 2006, they will agree that the "iPod Nano delay controversy" was very reminiscent of the missing iPhone debate that was spurred by Bernstein Research analyst Toni Sacconaghi this past January. Shaw Wu went from bullish on June 14 to bearish on June 28. He cut his price target by 25% and made up a rumor about an iPod Nano delay. I wonder why? What motivated Shaw Wu's actions at that time? And then, when Apple reports blow out earnings on July 19, 2006, Shaw Wu's sentiments change completely?



    Either Shaw Wu is terrible at financial analysis or he knows what he is doing and actively attempts to manipulate the stock price. He was either dead wrong about the Nano delays as Apple released the 2G iPod Nano on September 12, 2006 or he actively manipulates. Shaw Wu was either dead wrong about his price cut of Apple's shares from $101 to $75 or he actively attempts to manipulate. I have just a few questions Mr. Wu: Why did you make up a rumor that Apple was set to release a Nano in August 2006 and then make up another rumor that the iPod would be delayed? Why did you go from bullish to bearish in two weeks? What changed? How does it feel to be dead wrong? Why did you downgrade Apple with one day to go until earnings? Is it because you have no clue as to what you are talking about or is because someone has paid you to downgrade Apple today? Either way, investors should ignore anything you have to say.

    Finally, you say that you think Apple is trading at 28 times 2009 earnings? Believing that Apple is trading at 28 times 2009's earnings when it trades at $168 presupposes that 2009 earnings will be $6.00 a share. That's interesting. So you think Apple will show almost no growth between 2008 and 2009? Let me let you in on a little secret. Apple is going to earn $5.80 in 2008. Thus, your 28 times 2009 estimates of $6.00 in EPS assumes that Apple will see only 3.5% growth in 2009 - a year when Apple will start to see an impact to EPS from deferred iPhone revenue. The computer industry is growing at 11% a year alone. I guess you think that Apple will grow at 1/4 of the current market rate.



    Given Shaw Wu's quesitonable history, Shaw Wu is either terrible at financial analysis and forecasting or an active manipulator. Either way, investors should take what he has to saw with a huge grain of salt.



    Disclosure: I own long term 2009 and 2010 call options in Apple. The information contained in this blog is not to be taken as either an investment or trading recommendation, and serious traders or investors should consult with their own professional financial advisers before acting on any thoughts expressed in this publication.

  • Reply 10 of 33
    echosonicechosonic Posts: 452member
    Quote:
    Originally Posted by DigitalChan View Post


    Yes, or so a Senior Apple Vice President thinks:

    http://www.forbes.com/feeds/ap/2008/...ap4960808.html



    Schiller had to set that up wayin advance. Was it all of his holdings? Doubt it.



    He just wanted a new house perhaps, and that 23mil paycheck helped, I'm sure.
  • Reply 11 of 33
    buzdotsbuzdots Posts: 451member
    Quote:
    Originally Posted by AppleInsider View Post




    As a result, Wu upgraded shares of Apple to Buy from Neutral and instated a new 6-12 month price target of $210 per share (up from $175).





    Apple will be at $210 by the end of July if not sooner!



    Bet on it
  • Reply 12 of 33
    nceencee Posts: 836member
    Quote:
    Originally Posted by BuzDots View Post


    Apple will be at $210 by the end of July if not sooner!



    Bet on it



    And higher by the end of the summer, then a 2- 1 split will take place



    Here's hoping



    Skip
  • Reply 13 of 33
    Yet more evidence as to why no one in existence - past, present and future - should ever listen to Shaw Wu. How many times do I have to say it before you infidels see it?



    Kasper, being the Apple news specialist that he is, *should* see right through this guy, so I strongly suspect AI is receiving some sort of monetary kick-back from reporting this guy's swill.



    Kasper, do us all a favor and put Shaw Wu on your ignore list.



    -Clive
  • Reply 14 of 33
    olternautolternaut Posts: 1,376member
    If that Wu character is trying to manipulate the stock then he should be busted. But its my impression that this guy isn't too bright. Question is why are people paying this analyst?

    Really, this is ridiculous. LOL! Reminds me from that scene from the new movie IronMan. Anyone see it yet? They had a scene with that nutcase from mad money Jim Cramer. He was yelling like an idiot that Stark Industries stock was gonna tank. That reminds me when he said the same thing recently about Apple Stock.
  • Reply 15 of 33
    satchmosatchmo Posts: 2,699member
    Quote:
    Originally Posted by BuzDots View Post


    Apple will be at $210 by the end of July if not sooner!



    Bet on it



    I hope so. But I think it'll depend on what is offered at next month's WWDC.

    A 3G iPhone priced right, new iChat, GPS, user replaceable battery would go a long way at reaching this stock price.
  • Reply 16 of 33
    minderbinderminderbinder Posts: 1,703member
    Anyone else confused by this headline? I get it, but on first glance my brain sees 180 as a stock price number since that's close to what it's trading at right now.
  • Reply 17 of 33
    chris_cachris_ca Posts: 2,543member
    Quote:
    Originally Posted by DigitalChan View Post


    Yes, or so a Senior Apple Vice President thinks:

    http://www.forbes.com/feeds/ap/2008/...ap4960808.html



    http://finance.yahoo.com/q/it?s=aapl
  • Reply 18 of 33
    macfandavemacfandave Posts: 603member
    This does not look good.



    Shaw Wu has been around a while, so we can't give him the benefit of the doubt about not knowing how Apple stock works. Also, we all know that he is among a handful of analysts who have the power to move Apple's share price meaningfully.



    It just doesn't make sense that such a seasoned Apple analyst could sway so dramatically about Apple's business prospects.



    It would be interesting to know what communications he had just prior to his downgrade a few weeks ago and before his upgrade today. Did he speak to brokers, clients? If an influential analyst gives you heads-ups before he releases pronouncements, you could make a lot of money on buying low and selling high and making puts and calls.



    I'm sure Bush's SEC won't investigate this, but the integrity of the market requires the regulators keeping it fair.
  • Reply 19 of 33
    Quote:
    Originally Posted by echosonic View Post


    Schiller had to set that up wayin advance. Was it all of his holdings? Doubt it.



    He just wanted a new house perhaps, and that 23mil paycheck helped, I'm sure.



    Naturally..



    But I'd also assume that he would sell if he thought the stock was going to go up significantly more than it already has. The bubble is bound to pop. Wu was right the first time... it's gotten so much growth it is bound to go down to stabilize... in the short term there will be better entry points in the next year or so.



    The idea is to sell stock at the peak of a mountain not the base.
  • Reply 20 of 33
    ouraganouragan Posts: 426member
    Quote:

    As a result, Wu upgraded shares of Apple to Buy from Neutral and instated a new 6-12 month price target of $210 per share (up from $175).



    "Considering our bullishness on the macro trends [...] and assuming great management execution continues, Apple has earnings power significantly beyond consensus estimates," he added. "We think calendar year 2009 earnings is more likely closer to $7.50-8.00 than the $6.59 consensus estimate."





    Blowing expectations beyond any reasonable limit, keeping silent on any negative factors such as illegal stock option backdating or unreasonable pricing policies, will create a new bubble of unrealistic expectations among casual investors.



    Adressing Apple issues and judging the stock on the same basis as other tech stock would lead to a much more realistic evaluation.



Sign In or Register to comment.