Technically, it was Hudson Square's Daniel Ernst. But we have a few caveats.
Ernst on CNBC
Eyebrows were raised in October 2010 when Daniel Ernst hiked his 12-month Apple (AAPL) price target from $300 a share to $500. But perhaps drawing attention to himself was the point. The senior analyst at Hudson Square Research is now a regular contributor on CNBC and his current price target -- $700 -- is once again the Street's highest.
With Apple passing the $500 mark in early trading Monday, you might think Ernst had earned bragging rights for making the first $500 per share call.
But a look at his track record on Apple suggests otherwise. Not only did his Oct. 2010 price target bear no relation to the numbers in his spreadsheet, but of all the analysts who follow the company, his published estimates have proved to be among the worst. Over the past five quarters, his average error on earnings and revenues are second only to Morgan Stanley's Katy Huberty for the magnitude of their misses. Four days after his famous $500 call, he finished last in our quarterly Earnings Smackdown and got singled out in the write-up:
"We're not sure what to say about Hudson Square's Daniel Ernst, who took first place in gross margin by a rounding error but came in dead last in revenue and EPS and missed the iPhone number by 4.6 million units."
Finally, we should point out that Apple didn't actually reach $500 within the 12 months of Ernst's price target. (On Oct. 14, 2011 shares closed just over $422.)
According to Terry Gregory, who tracks such things at AAPLInvestors.net, credit for the best 12-month calls might be shared by Piper Jaffray's Gene Munster and Ticonderoga's Brian White, who on Jan. 19, 2011, set price targets of $484 and $550, respectively.
Or, depending on when Apple actually hits $500 per share, credit might belong to Evercore's Robert Cihra, who set his 12-month $500 target on April 21, 2011.
For the record, Bullish Cross's Andy Zaky, a blogger who is not part of the Wall Street establishment, wrote an item for Fortune.com two days before Cihra's note in which Zaky predicted Apple would soon be trading above $500, although he thought it would happen before the end of 2011. See Why Apple's shares are dirt cheap.
Approaching Apple from another angle, Asymco's Horace Dediu noted last May that while the share price seems to bear no relation to earnings growth, it has for the past three and a half years been highly correlated to the company's holdings in cash and marketable securities. In September he posted a chart that showed Apple hitting $500 when cash per share reached $100. On Friday he posted a follow-up. "With current cash per share reaching $95 to $100," he wrote, "it seems that the share price should be around $500 any time now."
Dediu's chart:
Source: Asymco.com
The company has gained nearly one Facebook in value since Steve Jobs died
On Oct. 4, the day before Steve Jobs passed away, Apple (AAPL) shares closed at $372.50 and its market cap stood at $347 billion.
Four months later, the stock is up nearly $100 and its market cap is $437 billion. To put that $90 billion gain in perspective, it's nine tenths the value analysts have placed on Facebook in MORE
Philip Elmer-DeWitt - Feb 8, 2012 7:09 AM ET
It's a piece of cake, he says. Just take the company's revenue guidance and add 15%
Apple beats its revenue numbers by a predictable 12% to 18%. Source: Bullish Cross
In a 5,000-word essay posted in Bullish Cross Monday, Andy Zaky laid out his method for estimating Apple's (AAPL) quarterly revenue and earnings numbers. He starts with three assumptions:
That most Wall Street analysts and financial writers are completely clueless and couldn't analyze their MORE
Philip Elmer-DeWitt - Dec 12, 2011 4:18 PM ET
A blogger-analyst highlights the growing gap between its earnings and its stock price
Click to enlarge. Source: Bullish Cross.
"In just four-years," writes Andy Zaky in a passionately worded post published Sunday on his Bullish Cross blog, "Apple's earnings have grown 600% to $27.68, and its revenue skyrocketed 341% to $108.2 billion. That's the most explosive 4-year growth rate of any large-cap company on the entire S&P 500."
Yet Apple's (AAPL) shares closed MORE
Philip Elmer-DeWitt - Nov 28, 2011 7:15 AM ET
Walter Isaacson and Steve Wozniak to deliver the keynotes
I've been invited to speak at an Apple Investor Summit being held in Los Angeles next March.
It's shaping up to be an interesting event. Steve Jobs biographer Walter Isaacson and Apple (AAPL) co-founder Steve Wozniak will deliver the keynotes, and the featured speakers include several of our regular commenters, among them Horace Dediu, Andy Zaky, Travis Lewis and Robert Paul Leitao.
The organizers MORE
Philip Elmer-DeWitt - Nov 2, 2011 6:49 PM ET
In the past, shares rose on the rumor and fell on the news. Not this time.
Wondering what's going on with Apple's (AAPL) share price with a big iPhone announcement just around corner?
Andy Zaky has been tracking the trading patterns before and after Apple's special events on his Bullish Cross blog (now behind a paywall) for several years. He offers these observations (I quote):
With the exception of the iPhone 1, Apple has MORE
Philip Elmer-DeWitt - Sep 30, 2011 10:55 AM ET
A report out of Apple's Asian supply chain may have sent the wrong signal to Wall Street
Apple (AAPL) shares fell sharply in early trading Monday following a widely reported note to clients from J.P. Morgan's Gokul Hariharan to the effect that multiple supply chain vendors in Asia have registered a 25% cut in fourth-quarter iPad 2 orders from Apple -- "the first cut ever we've seen" according to Hariharan. (Business MORE
Philip Elmer-DeWitt - Sep 26, 2011 11:30 AM ET
On June 17, he told readers to buy AAPL at $320. The stock took off two days later.
The stock hit a 7-mos. low on June 20
We gave Andy Zaky, an independent analyst with a enviable track record, a hard time a few weeks ago.
He had just published a report on his Bullish Cross blog (reposted on Seeking Alpha) advising investors to buy Apple (AAPL) at $320. Although his three MORE
Philip Elmer-DeWitt - Jul 8, 2011 7:06 AM ET
There's a seasonality to the company's share price. So beware those January 2012 calls.
Click to enlarge. The new Bullish Cross
With the usual caveat that past performance is no guarantee of anything, two recent reports have uncovered interesting patterns in Apple's (AAPL) share price.
Two weeks ago on Seeking Alpha, Jason Schwarz documented a weekly cycle of Monday lows and Thursday highs. Over the past 32 weeks, he reports, Apple's share MORE
Philip Elmer-DeWitt - Jun 27, 2011 12:09 PM ET
If you ask about sales in the quarter that just ended, you get three very different answers
Sources: Apple 2.0 poll, Thomson Financial, Apple Inc.
Apple's (AAPL) third fiscal quarter of 2011 ended Saturday at midnight. How did it go? That depends whom you ask.
In April, Apple CFO Peter Oppenheimer told analysts he expected Apple to earn $5.03 per share on sales of $23 billion. But given how Apple tends to MORE
Philip Elmer-DeWitt - Jun 26, 2011 11:34 AM ETEvery morning, discover the companies, deals and trends in tech that are moving markets and making headlines. SUBSCRIBE
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| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 7.95 | -0.16 | -1.97% |
| Intel Corp | 26.73 | -0.43 | -1.58% |
| Microsoft Corp | 31.27 | -0.17 | -0.54% |
| Ford Motor Co | 12.28 | -0.25 | -2.00% |
| General Electric Co | 19.39 | 0.17 | 0.88% |
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 12,938.67 | -27.02 | -0.21% |
| Nasdaq | 2,933.17 | -15.40 | -0.52% |
| S&P 500 | 1,357.66 | -4.55 | -0.33% |
| Treasuries | 2.00 | -0.04 | -1.96% |
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