Fin - Breakout - US

The Analyst Who Downgraded Apple Makes His Case

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Last Wednesday Alex Gauna, an analyst with JMP Securities, lowered his rating on Apple (AAPL) to "market perform" from "market outperform" over concerns that Hon Hai, Apple's manufacturing partner in China, could face "sales growth deceleration."

Gauna told Breakout that slower sales at Hon Hai could signal that Apple is facing "significant Android competition and weakness in computing products."

Investors shed Apple shares after Gauna's downgrade. The stock closed 4.5% lower to settle at $330.01 a share.

Ninety percent of Apple analysts have a positive rating on the stock, with an average target at $433, and downgrades aren't common. The last downgrade for Apple was in October 2010 by the firms Scotia Capital and Independent Research GmbH.

Five-star fund manager Bruce Ventimiglia of Saratoga Capital Management has a different take on the iPad maker, and he joined Gauna on the Breakout set to make the bullish case on Apple. Ventimiglia told Matt Nesto and Jeff Macke that Apple continues to be a strong investment for the long term and any market pullback signals more buying opportunities. Apple is among the top holdings in his Saratoga Technology & Communications (STPIX) fund.

Apple reports earnings April 19.

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