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‘Stagefright’ Spurs Security Probe Of Google, Apple, Telecom Firms

Federal regulators, citing global worries over the “Stagefright” security flaw, on Monday said they would seek information from Google, Apple ( AAPL ), AT&T ( T ), Verizon Communications ( VZ ) and others on software updates and measures to combat hacking. Alphabet ( GOOGL )-owned Google last week announced fixes to the Stagefright vulnerability . Apple has also faced more threats from malicious software via text messaging, apps and other tactics that hackers utilize. Apple and Google alert iOS and Android software users, respectively, to their security updates. The Federal Communications Commission and Federal Trade Commission plan to jointly look into how mobile phone vulnerabilities are addressed and what role is played by service providers such as Verizon, AT&T, T-Mobile US ( TMUS ) and Sprint ( S ). “There have recently been a growing number of vulnerabilities associated with mobile operating systems that threaten the security and integrity of a user’s device, including ‘Stagefright’ in the Android operating system, which may affect almost 1 billion Android devices globally,” the FCC said in a statement . AT&T and Verizon shares both fell a fraction in the stock market today , while shares of Alphabet and Apple rose a fraction. The Federal Trade Commission said it has ordered eight mobile device manufacturers to provide the agency with information about how they issue security updates to address vulnerabilities in smartphones, tablets and other mobile devices. The eight companies are: Apple, Google, BlackBerry ( BBBY ), HTC America, LG Electronics, Microsoft ( MSFT ), Motorola Mobility and Samsung Electronics.

When Tim Cook Gives A TV Interview, Apple Investors Should Beware

Apple ( AAPL ) CEO Tim Cook doesn’t give many TV news interviews, but when he does his company’s stock tends to get a short-term bump but then decline three months later and stay down for a few months. In a research report Monday, Bernstein analyst Toni Sacconaghi said Cook’s TV appearances tend to follow periods of investor concern or controversy. Cook has made seven major TV appearances since becoming CEO of Apple. And six of those seven appearances have occurred during the past two years of his four-and-a-half-year tenure. “When Tim Cook spoke with Jim Cramer on CNBC’s ‘Mad Money’ last week, many investors asked whether there was any historical pattern to his media appearances (i.e., does he only engage with the media when things are going poorly?), and whether the media appearances presaged stock performance in any way,” Sacconaghi said. So, Sacconaghi ran the numbers. “All seven appearances have followed a two-week period where the stock has underperformed (5 times) or performed in-line (2 times) with the market,” Sacconaghi said. “Cook’s television appearances have generally attempted to soothe prevailing investor concerns, and Apple’s stock has initially typically reacted neutrally or somewhat positively to the public appearances historically, as it did last week. “However, generally, the public appearance (and) associated commentary (have) not been a good leading indicator for the stock over longer periods.” One day after a Cook TV interview, Apple’s stock on average has risen 0.9%. A week later, Apple stock is up 0.3%. One month later, it’s up 1.3%. But three months later, it’s down 5.2%. Six months later, Apple stock is down 7.8% on average. Looking at Cook’s TV appearances just in the last two years, the longer-term declines are less dramatic. The day after Cook’s last six TV appearances, Apple stock has risen 0.8% on average. A week later, it’s up 0.6%. A month later, it’s up 2.6%. But Apple stock has averaged a 1.1% decline after three months and a 3.6% decline after six months, Sacconaghi said. A better indicator of Apple’s stock performance is tracking the company’s share repurchases. “Since 2012, when Apple has repurchased $14 billion or more of its stock in a given quarter, its stock has meaningfully outperformed over the next 1 to 2 quarters — in most other periods, the stock has underperformed,” Sacconaghi said. Sacconaghi reiterated his outperform rating on Apple stock with a price target of 135. Apple rose a fraction to 92.82 on the stock market today . On Friday, Apple shares hit their lowest level in nearly two years: 91.85 in intraday trading. Apple Stock Gets Price Target Cut From Baird Baird analyst William Power on Monday maintained his outperform rating on Apple stock, but trimmed his price target to 115 from 120. Power said he has grown “more cautious near to medium term” on Apple. Consensus estimates remain stubbornly too high for fiscal Q4 and the full year because of “inflated iPhone 7 expectations,” he said. Power kept his outperform rating on Apple stock because, he says, downside risk is minimal. Most of the bad news is already priced into shares, he said. On Sunday, RBC Capital Markets analyst Amit Daryanani said Apple stock is oversold and he sees a buying opportunity. He reiterated his outperform rating on Apple stock, with a price target of 120. RELATED: Apple Recruits SAP To Help Sell iPads, iPhones To Companies

Drone Market Positive For AeroVironment, Not GoPro, Piper Says

The commercial drone industry is taking off and is likely to get a big lift once the Federal Aviation Administration completes its regulations for small unmanned aerial systems by late spring, Piper Jaffray said in a research report Monday. The buzz was positive at the Xponential 2016 conference, sponsored by the Association for Unmanned Vehicle Systems International and held May 2-5 in New Orleans, Piper Jaffray analyst Troy Jensen said. The annual event is the largest drone trade show in North America. “Following conversations with the leading companies in the space, our biggest takeaway was demand for drone hardware, software and services continues to inflect, as more and more companies are realizing the value this still-emerging technology can add,” Jensen said. “We were also very encouraged to hear most in the industry are confident the FAA will release the long-awaited small UAS ruling by ‘late spring.’ “That said, we continue to believe we are in the early innings of a multibillion-dollar market opportunity, and expect the industry to see a bigger inflection once favorable regulation is put in place.” Historically, the Xponential trade show has focused on military applications for drones, but the fast-growing commercial drone industry has shifted the focus of the show to enterprise applications. Companies at the show included Aerialtronics, AeroVironment ( AVAV ), Aeryon Labs, Agribotix, AirRobot, Airware, DJI, DraganFly Innovations, Kespry, MicaSense, PrecisionHawk and Pulse Aerospace. Of those, only AeroVironment of Monrovia, Calif., is publicly traded. Jensen rates AeroVironment stock overweight, with a price target of 36. AeroVironment stock fell 1.3% to 28.11 on the stock market today . “Although revenue levels for most drone companies remain sub-$10 million on an annual basis, we were told by more than one company they have recorded more revenues in Q1 than they did in all of 2015,” Jensen said. 2.7 Million Commercial Drones Expected By 2020 The FAA estimates that annual sales of drones for commercial purposes will grow from 600,000 in 2016 to 2.7 million by 2020, he said. Amazon.com ( AMZN ) is among companies experimenting with using drones for delivering products to customers, but many hurdles remain and it’s too early to say when this might become a reality. The FAA’s small UAS regulations are expected to allow drones weighing under 55 pounds to fly commercially without having to file for certain exemptions. The rules should make it easier and faster for businesses to fly drones for most applications, Jensen said. Meanwhile, the FAA predicts that sales of consumer drones for hobbyists will grow from 1.9 million in 2016 to as many as 4.3 million in 2020. The consumer drone market, however, has become highly competitive, with aggressive price competition. China-based DJI is the leader in the consumer drone market. Piper is aware of two companies that intended to release a consumer drone in 2016 but decided to delay their product launch or not go forward because the market opportunity is not as lucrative as it was before, Jensen said. In addition to those two companies, action-camera maker GoPro ( GPRO ) last week announced that it is delaying the release of its Karma drone from Q2 until the holiday shopping season. Piper analyst Erinn Murphy on Monday reiterated her underweight rating on GoPro stock, with a price target of 6.50. GoPro stock tumbled 6.6% to 9.77 on Monday. That’s its lowest price in nearly three months and is close to its all-time low of 9.01, reached on Feb. 4. “We believe companies such as GoPro who have yet to launch a consumer drone could have a tough time, because as many category leaders have already found (DJI, Parrot etc.), developing a drone autopilot is not easy and typically takes second- and even third-generation models to develop a bug-free drone,” Murphy said. “At the time GoPro launches its drone this holiday, we are concerned that pricing could be an issue given how competitive pricing has already been for its major peers.” Piper’s Jensen says the drone market is likely to see a lot of consolidation over the next couple of years. “This consolidation will include bigger companies, not in the market today, acquiring already established players in order to take advantage of the growing market opportunity, as well as smaller companies merging in order to penetrate different areas of the market,” he said. “Over that same time period, we also believe new companies will be entering the market and private equity money will continue to flow in.” RELATED: Drone Delay Bad Karma For GoPro; Stock Skids On Q1 Report