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Picture 1CNBC’s Jim Goldman has an interesting post on Tech stocks and Apple (AAPL) today. He looks back at the flip flop analysts’ earnings and price projections for Apple (AAPL) and briefly reports on expectations for a new iPhone that many be unveiled at the forthcoming WWDC keynote on June 8. This is also a venue where we might hear about an iPhone deal with China Unicom.

picture-11Regular iPhonAsia readers know we’ve been very critical of RBC’s Mike Abramsky and Morgan Stanley’s Katie Huberty. Both analysts have now had their Ebenezer Scrooge Christmas morning awakening and reversed their bearish calls on AAPL. All we can say is what took them so long? See iPhonAsia’s poll > HERE

TechCheck Excerpt: Covering Apple can be fun, in a nauseating kind of way: Consider RBC Capital’s Mike Abramsky earlier this year who did a whiplash-inducing about-face after essentially rating Palm a “buy,” and Apple a “sell.” He stepped up, admitted he was wrong, and upped Apple to a “buy,” and dramatically increased his targets.  Read More

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Update – May 09, 2009: Royal Bank of Canada (RBC) analyst Mike Abramsky reached out to Fortune Apple 2.0 columnist Philip Elmer-DeWitt on Friday to offer up a bit of a mea-culpa for his “country mile” miss on Apple’s (AAPL’s) share price movement. On January 18, 2009 Mike Abramsky placed a sell recommendation on Apple with a $70 price target. AAPL at that point in time was trading at $82.83. As of Friday (5/8/09), Apple (AAPL) was hovering near $130 per share … some 60 points above RBC’s original target price.

wrong wayRead Mike Abramsky’s mea culpa here > via Fortune Apple 2.0. NOTE: Mike Abramsky saw the bright “wrong way” sign and has changed course. He recently raised his Apple (AAPL) price target twice – now at $165. Read below …

Update – April 23, 2009: It happened! I know I shouldn’t be enjoying this so much. But we have to smile just a bit. We have our answer to the poll above! “Whoops! Did I say $70? I meant $170! My bad.”  Yep … Today Mike Abramsky raised his Apple (AAPL) price target from $95 (was $70 just days earlier) to $165!

Update – April 20, 2009: Pigs are indeed flying. Mike Abramsky has raised his Appple (AAPL) estimate. A whopping $25 but still some $25 below the current AAPL price (120 today). Excerpt from Barrons: 04/20/2009 “RBC Capial’s Mike Abramsky keeps his Underperform rating, but ups his target to $95, from $70, to reflect “peer multiple re-valuation.” 

April 3, 2009: RBC wireless analyst Mike Abramsky recently raised his price target for Palm (PALM) and Research in Motion (RIMM) and can’t seem to appreciate Apple’s (AAPL) ability to defy his lowered price target. On January 18, 2009, when Apple (AAPL) was trading at $82, Mike Abramsky lowered his target on AAPL to $70 and just two days later substantially raised his price target on RIMM (then trading @ $51 give or take) to $75. Today (April 2) RIMM is up nicely after good earnings* (hovering at $59 after hours) and AAPL is trading after hours at $115. Nice going Mike … you’re up $8 bucks on RIMM … finally!  I only hope RBC’s clients did not short Apple. If so they’ve now lost $33 per share on that trade.

For the record … The iPhonAsia editor is long Apple (AAPL) and has doubts over the integrity of Palm’s IP claims and ability of Research in Motion to gain marketshare vs. iPhone … In other words, iPhonAsia holds the exact opposite views as RBC’s telecom analyst Mike Abramsky. Read > HERE and watch video > HERE

To the Moon Alice!

To the Moon Alice!

 

 

 

 

 

 

*Research in Motion (RIMM) warned a few weeks ago and lowered the bar substantially … today they came in with earnings above the “lowered” bar.  The Street reacted favorably and RIMM moved up nicely in after hours trading. Congratulations to RIMM shareholders. I hope RIMM and AAPL rocket to the Moon! 

For more background see >

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dean-wormeriPhonAsia issues our 2nd Dean Wormer Award

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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.

When will RBC’s Mike Abramsky raise his $70 price target on Apple (AAPL)?

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)

The following is an excerpt from a Silicon Alley Insider post on January 18, 2009. The Henry Blodget post was titled: Apple Cut To SELL On Weak Management Team (AAPL). Read > HERE ….

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

COMMENTS:

Dan B (URL) said:
Apple has a superb bench to support Steve Jobs. Apple Chief Operating Officer (COO) Tim Cook is an extremely capable executive who will take the helm at Apple and not miss a beat. As an Apple shareholder, I’ve had responsibility of attending Apple, Inc. shareholder meetings and listening to every Apple (AAPL) quarterly earnings conference call. Tim Cook presides at these events and many others. I am comfortable with Tim Cook running Apple. He is a confident and capable executive who is very much on top of Apple’s business operations, product development path and financials.              

Here are a couple of links re Apple’s executive management team and Tim Cook, Apple COO… 
http://www.cnbc.com/id/15837548/cid/118190 
http://money.cnn.com/2008/11/09/technology/cook_apple.fortune/index.htm?postversion=2008111005 
https://idannyb.wordpress.com/2009/01/15/apple-aapl-buying-opportunity-we-think-so/ 

Anna said:
Abramsky works for RBC (Royal Bank of Canada) Capital. The CEO of RBC sits on RIM’s board, and RBC has a banking relationship with Research in Motion (also HQ’ed in Canada). Apple is giving RIM a run for their money in the smart phone market. Do you think Abramsky’s call is without bias?
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dj said:
Oh Anna please grow up….there are 10,000 anal_yst kicking down RIMM everyday just because there Canadian……Mactards are so upset that AAPL is trending down an little (1/10th the size) old RIMM moving up.
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Dan B (URL) said:
You need to place a large asterisk on RBC’s AAPL assessment … There are supposed to be firewalls in place to prevent bias from creeping in to analysts’ research opinions due to investment banking business activities of their own firm (Henry is an authority on this subject). However, I rather suspect RBC’s partnership with RIM (RIMM) has had an impact on RBC’s Aramsky’s view of Apple. Read here > http://www.phonecontent.com/bm/news/2053.shtml              

RBC (Royal Bank of Canada) disclosure information: RBC is a major investor in RIMM. In addition, RCB’s Chief Operating Officer, Barbaras Stymiest, sits on the Board of Directors at RIMM. 

“RIM, RBC and Thomson Reuters share the common belief that mobile applications and services will propel the industry forward and the BlackBerry Partners Fund is being formed to help fuel innovation and activity in the mobile ecosystem.” 

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dj said:
ah Dan B..Barbaras Stymiest,has not been with RBC for over 6yrs and does not have seat on the RIMM board…..maybe you should not beleive everything you read on the Net before you do some fact checking…..but so sad for you Mactards
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Anna said:
dj —              

“Barbara G. Stymiest, FCA has been the Chief Operating Officer of Royal Bank of Canada (also known as RBC Financial Group) of Liberty Life Insurance Company since November 1, 2004. Ms. Stymiest is responsible at Royal Bank of Canada for its strategic development as well as all corporate functions including risk management, finance and treasury. She is responsible at Liberty Life Insurance Co. for directing enterprise strategy, as well as all corporate functions including …” 

http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId=8279227&capId=109809&previousCapId=399960&previousTitle=Research%20In%20Motion%20Ltd. 

Also, from RBC’s website — somebody better tell them if she’s not the Chief officer, because she’s still listed there: 
http://www.rbc.com/newsroom/down2-stymiest.html

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Anna said:
Also, the RBC site lists her directorship with RIM:              

“Ms. Stymiest currently serves as a director of RBC Dexia Investor Services Limited, Research in Motion Limited, Symcor Inc., Canadian Institute for Advanced Research, Royal Ontario Museum and Toronto Rehabilitation Institute Foundation. She has also served on a … ” 

from http://www.rbc.com/newsroom/down2-stymiest.html 
(The Royal Bank of Canada website)************

Dan B said:
Gee… What a surprise … RBC just raised estimates for RIM today.
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Dan B (URL) said:
The “firewalls” between analysts and their firm’s banking activities are supposed to prevent bias from creeping into reports on companies they follow. Yet this bias does exist. Not only are their BOD conflicts at RBC, there are also direct investments by RBC (RBC Venture Partners) in RIM.              

http://metue.com/05-12-2008/blackberry-partners-fund-vc-fund-launches/ 
http://www.rbc.com/vp/ 

“Monday, RIM announced the formation of a $150 million fund to invest in services and applications for their rival Blackberry platform. Canadian VC firms JLA Ventures and RBC Venture Partners are lending expertise to manage the fund. The fund will be called the Blackberry Partners Fund. The fund is anchored by capital commitments from RIM, RBC and Thomson Reuters.”

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NOTE: iPhonAsia would like to give a special shout out to Jeff Macke, the recipient of our 1st Dean Wormer Award. Jeff responded through several witty post comments. He can dish out with the best of them and he made a number of excellent points. Thanks for being a good sport Jeff … but you still get the award 8)
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