I used to see him as a kind of Wall Street troll—a provocateur who offered contrarian opinions about Apple just to get on CNBC. See, for example, the 2014 Chowdhry pronouncement singled out by the Motley Fool as “The worst analyst’s call in history.”
But over the years I’ve come to appreciate that Chowdhry’s reports to clients are often based on actual reportorial legwork—the details of which he takes pleasure in enumerating.
“Since April 10 we have visited 11 Apple Stores, most of them multiple times, talked with almost 90 customers and observed close to a thousand Apple customers,” began a typical note last May.
Another starts: “We have attended 7 Apple WatchKit Hackathons, visited 9 Apple Stores and have observed more than 4,500 users…”
So I’m not as ready as I once was to dismiss today’s hyperbolic offering—six reasons Apple investors have “zero confidence Apple’s current Management and Apple’s Board”—as pure Wall Street clickbait.
His reasons: (I quote)
- Apple Stock has fallen from $132 to $115, thereby erasing about $110 Billion in shareholder value; and Apple’s management has done nothing to address the erosion of shareholder value
- Apple’s Management Team and Board have embarked on a huge share buyback program, but the buyback program is not working…Enterprise Value/Operating Income Multiple continues to decline, Debt has skyrocketed and shareholders have lost $110 Billion
- Apple has gone from from being a Zero debt company to a Debt-laden company with more than $50 Billion in debt…the debt that is taken to fund the ineffective stock buybacks and avoid the US Tax Code of repatriation of Cash stored abroad
- Some investors are increasingly feeling that it may make sense for Apple to pay $30 billion in taxes, and repatriate all the money to USA, and use that money to buyback the shares, rather than take unnecessary debt just to avoid the US Taxes “Taking debt to fund buybacks is insane”
- Finally, investors feel that Apple’s Management and Board have zero focus on increasing the Enterprise Value/Operating Income Multiple. The high Multiple typically occurs by meeting or beating the estimates and raising the guidance….for many quarters under this current Apple’s Management and Board, Apple has instead handily beaten the estimates, but guided low.
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“Because of all the above,” Chowdhry concludes, “in-spite of Apple setting itself for a strong December Quarter, Investors have zero confidence in Apple’s current Management and Board.”
How widespread are these sentiments? Who knows.
This is one of those reports that cries for Chowdhry-style enumeration. How many hundreds of investors did he talk to? How many billions do they have under management?
As I say, I don’t know what to think about Trip Chowdhry. I’ll be interested who takes the bait on this one. He got at least a nibble out of me.
See also: How wrong-headed can one Apple analyst be?
Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple (AAPL) coverage at fortune.com/ped or subscribe via his RSS feed.
