iPhonAsia issues our 2nd Dean Wormer Award
And the co-winners are … drum roll please … Royal Bank of Canada and Canaccord Adams
iPhonAsia comment: Opinion Alert! The following post is just one man’s opinion (yes bias) and our view is unabashedly pro Apple (AAPL). See also related post > Does RBC have a leaky Chinese Wall?
In mid January ’09, two Canadian investment research firms turned negative on Apple (AAPL) and positive on Research in Motion (RIMM). Specifically, on January 18, 2009 the Royal Bank of Canada’s Mike Abramsky placed a sell recommendation on Apple with a $70 price target. AAPL at that point in time was trading at $82.83. Soon after this RBC downgrade, Apple posted Q1 2009 earnings. Apple handily beat Street analysts’ consensus. As of today (2/6/09), Apple (AAPL) is hovering near $100 per share … some 30 points above RBC’s target price. Not long after RBC went negative on Apple (AAPL), Canaccord Adams issued a “pro-blackberry, anti-iPhone” (my characterization) research report. EXCERPT: “Canaccord believes Apple’s earnings suggest that Research In Motion has retaken its market share dominance over Apple” Canaccord placed a buy rating on RIMM with a target of $60 and a hold rating on AAPL with a target of $90.
There are far less capable Apple (AAPL) analysts (e.g. Morgan Stanley’s Katie Huberty) than our Canadian friends, yet I have to wonder why a relatively sharp analyst like Mike Abramsky would dare go so negative on Apple (AAPL) and just a day later go so positive on Research in Motion (RIMM). If it’s not ignorance then what is the motivation for RBC’s and Canaccord’s calls? We suspect that there is a decidedly blackberry odor blowing in the north winds. In my opinion, there may also be biases that leaked through the firewalls that are supposed to separate a firm’s “research” from “investment banking” activities.
The North Winds Royally Blow it on Apple (AAPL)
EXCERPT: A Wall Street analyst has said what a lot of folks have been thinking, which is that Apple (AAPL) is a far weaker company without Steve. Mike Abramsky of RBC cut the stock to SELL with a $70 target–a stark contrast to the near-$200 hallucinations that most of the Street is still maintaining.
The editor of iPhonAsia (Dan B) added a few comments to this post … see below. Note: This is a redacted version … full post/comments can be found > HERE