Jobs Absences Failed to Hinder Apple Rallies: Chart of the Day
Jan. 19 (Bloomberg) -- Tim Cook, chief operating officer of Apple Inc., Stephen Leeb, president of Leeb Capital Management, and Brian Marshall, an analyst at Gleacher & Co., discuss Apple Chief Executive Steve Jobs's medical leave and the company's first-quarter earnings. Apple posted a 78 percent jump in profit, helped by holiday buying of iPads. William George, a professor at Harvard University, and Nell Minow, co-founder of the Corporate Library and director of GovernanceMetrics, also speak. (Source: Bloomberg)
January 18 (Bloomberg) -- Timothy “Tim” Bajarin, founder and president of Creative Strategies Inc., discusses the potential impact of Apple Inc. Chief Executive Officer Steve Jobs's medical leave on the company. Bajarin, who speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line,” also discusses the executive management team at Apple. (Source: Bloomberg)
Jan. 18 (Bloomberg) -- Nell Minow, co-founder of the Corporate Library and director of GovernanceMetrics, talks about the medical leave of Apple Inc. Chief Executive Officer Steve Jobs and the responsibility of Apple's board to inform shareholders of the situation. Minow, speaking with Margaret Brennan on Bloomberg Television's "InBusiness," also discusses Goldman Sachs Group Inc.’s decision to halt a sale of Facebook Inc. shares to U.S. investors. (Source: Bloomberg)
Apple Inc. Chief Executive Officer Steve Jobs’ medical absences have done nothing to halt past advances in the company’s shares.
The CHART OF THE DAY shows that during his leave from August to October 2004, the shares jumped 26 percent, compared with a 0.6 increase in the Standard & Poor’s 500 Index, data compiled by Bloomberg show. When he took time off from January to June 2009, Apple climbed 66 percent, compared with 10 percent for the benchmark index for American equities, the data show.
The two periods generated an annualized return of more than 200 percent, compared with Apple’s yearly gain of 37 percent since Jobs came back as CEO in 1997, according to data compiled by Bloomberg. The world’s second-most valuable company should withstand his latest leave as long as it’s temporary, according to Brian Barish, who oversees $6 billion as president of Cambiar Investors LLC in Denver.
“There’s limited competition in smartphones that have the capability their phones have, and so no matter who the CEO is, they’re going to have some amazing numbers,” Barish said. “Ultimately, his health or lack thereof is more of a longer- term issue.”
Apple fell 2.3 percent to $340.65 yesterday after losing as much as 6.5 percent when trading began. After exchanges closed, the company announced first-quarter profit and a second-quarter earnings forecast that beat the average analyst estimates. Jobs, a cancer survivor, is taking a leave to focus on his health, putting the company in the hands of Chief Operating Officer Tim Cook for the third time in seven years.
Were Jobs to retire, the stock could tumble, Barish said. Microsoft Corp. shares plunged 50 percent in the year after Bill Gates left his CEO post in January 2000, compared with a 9.1 percent retreat in the S&P 500. General Electric Co. lost 29 percent in the 12 months after Jack Welch ended his term in September 2001.
“Guys that are really uniquely well-regarded as CEOs, there’s a halo effect in terms of the valuation of their stock,” Barish said. “As that halo fades, ultimately there’s a lot of valuation compression that occurs.”
To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
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