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Don’t Buy Apple Stock After Tim Cook Goes on TV

Apple CEO Tim Cook has made seven major television appearances since taking the helm, often after the company’s stock price has been lagging. But while the share price tends to rebound slightly in the few days after Cook’s TV interviews, it trails behind the market over the next few months, according to Toni Sacconaghi, an analyst at Sanford Bernstein & Co.

Apple shares trailed behind the Standard & Poor’s 500 Index by 4.4% in the two weeks leading up to a Cook TV spot, according to Sacconaghi. The day after such an appearance, the stock outperformed the index by 0.9% and by 0.8% after three days. But Apple shares trailed the S&P 500 by an average of 5.2% one month after Cook was on TV and by 7.8% after three months.

Cook appeared on Jim Cramer’s CNBC show Mad Money on May 2 after shares of Apple had been mired in an eight-day losing streak on the stock market—the longest since 1998.

That prompted long-time Apple analyst Sacconaghi to query if such appearances indicated things might be improving behind the scenes, but his research showed just the opposite. Cook took over the helm at Apple in August 2011 and has since done only limited public interviews on video streaming or TV, including Charlie Rose’s PBS show The Week in 2014 and 2015 and an appearance on ABC News in February.

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“Cook’s television appears 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,” he wrote in a report on Monday. “However, generally, the public appearance/associated commentary has not been a good leading indicator for the stock over longer periods.”

In the four trading days after Cook’s latest appearance, shares of Apple (AAPL) lost 1% matching the performance of the S&P 500 Index. Apple shares have lost 11% so far this year as iPhone sales shrunk for the first time, and some investors have grown concerned about Tim Cook’s credibility.

Instead of trading on Cook’s TV spots, investors should pay more attention to buying shares after Apple engages in major share repurchasing, Sacconaghi advised.

Since the end of 2011, Apple shares have typically outperformed the market after the company has bought back at least $14 billion of stock in a quarter. The buyback amounts in each quarter are reported with almost a one month delay in Apple’s quarterly earnings reports.

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That has happened three times since the end of 2011, and Apple has outperformed the market by 20% over the four months after the quarter’s end and 27% over seven months, Sacconaghi found.

In all other quarters, Apple shares trailed the market by 4% after four months 6% after seven months.

“Indeed, the old adage of ‘Do What They Do, Not What They Say’ appears to hold for AAPL,” Sacconaghi wrote. “We encourage investors to monitor buybacks going forward, given their history as an effective leading indicator.”