The Man Downgrading Apple on `Moral Grounds’

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Jan. 16 (Bloomberg) –- Standpoint Research Founder Ronnie Moas and Customer Growth Partners President Craig Johnson discuss Best Buy’s disappointing holiday sales and how working conditions or treatment of employees should impact your investing decisions. They speak to Pimm Fox on Bloomberg Televisions’ “Taking Stock.” (Source: Bloomberg)

It's a company with a great history and a great future.

The present is not so good.

It's a very competitive industry.

Margins are tiny and it is not managing the business that well right now.

It is suffering from what we call the tear any of the installed base.

These giant behemoth stores that they need maybe half the square footage of but they are stuck with them.

They've tried to dispose of some of them and they are operating on a profitability race to the bottom.

They have to get out of that price competition.

They collect investment.

I call it cutting prices.

They have to get out and figure what the value proposition is that we can bring to the customer that is as exciting as it used to be in the old days when you and i would go into best buy 20-25 years ago.

It was great.

Chuck e. cheese was a great ways to bring my kids 20, 25 years ago but now, not so much.

They are not the voice of authority that they used to be.

Ronnie, talk about it as a buy in the stocks.

It was the best performing stock in the s and p 500 and one it balls today, you have to go back to the spreadsheet and say the news is lousy, the stock cratered, is it worth something?

I have a problem with best buy.

I don't know what kind of damage amazon, apple, and the competitors will do for them.

I missed the move up but i was not david them today when it dropped 30% -- i was not a victim today.

These are electronics made by samsung, apple, all over the world.

You recently came up with a report on which you focus not so much on the technology and the customer but on the people that construct of apple products.

What was your conclusion?

I blacklisted them on moral grounds.

They are sitting on $150 million in cash and their employees in asia are making less than three dollars an hour and many have committed suicide.

In this country you get profit sharing, health coverage.

Apple would never be able to get away treating employees the way they do in asia.

As part of the press attention you have received because of this, it raises the issue of charity and philanthropy.

It's very good at raising money for causes, fighting cancer and so on.

You you feel the same way about that industry?

They make rod october sees in industries that are not conducive -- they make hot acts overseas -- they make products overseas.

The reason i single them out is because apple is sitting on $150 billion in cash and an apparel company with razor thin margins.

Craig johnson, does it matter where the apparel is made?

Do the companies carry?

They want to do what is right by the consumer.

In a sense, consumers are agnostic where the product comes from.

All things being equal, if the product is made in america, it is often more expensive than made elsewhere.

You have an issue of creative attention but it is not in business to help solve everybody else's problems.

They are solving their customers problems.

They are giving the customer what the customer wants.

Whether it is best buy trying to do that, avalos and doing it, that's the reason they are in business.

Having said that, there are links.

What are the responses of the industry?

More european companies than the u.s. companies in that it's a very different situation if a company sources its products from third-party suppliers and they are under restriction to only do it in these certified good plants and the fire break that bond and dumps it into some fly-by-night outfit.

Should you hold the vendor responsible, the brand?

Should you hold the vendors that sell the brand?

That's why we started with best buy selling apple products.

Just to close the loop here, you have been following an up or a company.

American apparel has 250 stores over 20 countries and they are trying to do the opposite of what their competitors are doing.

They're trying to keep the jobs here, manufacture here, and not is the sweatshops in asia.

The problem is they are having trouble turning a profit.

But the problem when you have extreme forms of capitalism and the ceo has to choose between turning a profit and treating their workers in an ethical, moral, and fairway.

That is the problem that it's a pressure to act in immoral and unethical ways.

Thank you very much, ronnie moas from standpoint and craig

This text has been automatically generated. It may not be 100% accurate.


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