Daniel Ernst
Who first called Apple at $500?
February 11, 2012: 6:15 AM ETTechnically, 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
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Monday was raise-your-Apple-estimates day on Wall Street
Goldman Sachs, Needham and Hudson Square Research issue new notes
You can tell you're getting close to an Apple (AAPL) earnings report when the analysts start dusting off their spreadsheets and issuing new estimates. At least three came in on Monday.
Needham's Charlie Wolf made the biggest adjustment, hiking his earnings estimate to $10.85 from $9.55 on Street-high sales of $41.15 billion, up more than $3 billion from his previous estimate. He MORE
Philip Elmer-DeWitt - Jan 9, 2012 12:57 PM ETPosted in: Apple, Bill Shope, Charlie Wolf, Daniel Ernst, Goldman Sachs, Hudson Square Research, iPhone, Needham -
If Amazon's Kindle Fire is so hot, why is it still in stock?
A spot check of retail sales a week before Christmas raises an interesting question
In a note to clients issued Monday, Hudson Square Research's Daniel Ernst reported on the results of a pre-holiday scouting trip he took to retail stores in New York and Connecticut over the weekend -- only a handful of shopping days before Christmas -- where he found "floor traffic up materially, but lines at checkout short."
Demand for MORE
Philip Elmer-DeWitt - Dec 19, 2011 10:25 AM ETPosted in: Amazon, Apple, Christmas, Daniel Ernst, Hudson Square Research, iPad, Kindle Fire, Tablets -
Another Apple blowout quarter. Once again, the Street blew it
But an amateur -- a Romanian mathematician teaching in Paris -- nailed the numbers
This story never gets old.
An army of Wall Street analysts, backed by the computing power of some of the world's richest banks and brokerage houses, have once again been out-foxed and out-analyzed by rag-tag bunch of bloggers, amateurs and independent investors.
A glance at the chart at right, which lists the 48 analysts we polled in advance of MORE
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iPad sales estimates for fiscal Q3 range from 6.0 to 9.5 million
Mean analyst estimate: 7.9 million. The amateurs, as usual, are more bullish than the pros
Apple (AAPL) is scheduled to report its fiscal third quarter earnings on July 19, a week from today, and in preparation for our quarterly earnings smackdown we've been gathering estimates from the small army of analysts -- profession and amateur -- who follow the company.
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The Apple-branded campus
College PC purchases are down for the 4th year in a row, but the Mac's share is growing.
Apple (AAPL) products play an oversized role in the small survey of college campuses (seven schools, 212 students) released Monday by Hudson Square Research's Daniel Ernst.
Although spending patterns were mixed -- fewer PCs and MP3 players, more TVs, mobile phones and digital cameras -- "Apple's share of student spending," writes Ernst, "increased materially."
Specifically, MORE
Philip Elmer-DeWitt - Sep 13, 2010 10:45 AM ET
