| |
| |
|
Investing Information |
|
|
|
Have Analysts Gotten Honest?
It caught my attention when I heard an analyst on a popular financial news program tell investors to sell a stock because too many analysts liked the company, citing the fact that there were no sell ratings. It seemed perfectly logical to me that analysts wouldn't be telling investors to sell 3M (MMM), which has one of the most consistent positive earnings records in the history of the stock markets. But being suspicious of conflicts of interest between brokerage firms and analysts I decided to do a bit of fact checking anyway. While the stock did not have any sell ratings at the time of writing, there were quite a few hold ratings. Now I feel compelled to diverge here and say that the hold rating seems quite illogical to me. If a stock is good enough to hold it's good enough to buy, and vice versa if you wouldn't want to buy it then you shouldn't want to hold on to it either. As it turns out, the average analyst rating for 3M was only slightly and insignificantly better than the average for all stocks in the Dow Jones Industrial Average, of which the company is a component. But what was most interesting about the ratings on Dow components was that, despite numerous and serious legal problems, AIG (AIG) was tied with General Electric (GE) and Du Pont (DD) for the third best rating, only bested by Citigroup (C) and Microsoft (MSFT). AIG was actually more highly recommended by analysts than J.P. Morgan Chase's (JPM) and American Express (AXP). This didn't do much for my confidence in analyst ratings. So I dug a little deeper looking at the more statistically significant S&P 500. What I found was that companies in the index with the worst revenue performance did actually carry more sell ratings than companies with the best performance. At least analysts were using the sell rating, something they seldom did in the past. There was, however, a significant bias towards the neutral 'Hold' rating for all stocks indicating reluctance on the part of analysts to commit to buy and sell recommendations. Mark Mahorney is a freelance financial writer for hire. Mark Mahorney
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
It's Not the Size of Your Bank Account You might think that if you win the lottery or get a huge raise, all your problems will be solved. Sounds logical, right? Well, it might sound logical, but it isn't. Annuity Help Many people today are looking for annuity help. The biggest challenge seems to be that most of the help is biased. Coca-Cola - A Value Stock? There has been much talk lately about Coca-Cola and its potential as a value stock - as it now spots a dividend yield of 2.6% (which is the highest dividend yield since the late 1980s) and a P/E or less than 21 - right at the bottom of its five-year low. Types of Investment The word 'investments' is one that most of us are familiar with hearing in financial context. For many of us, it may make us thing of big business and vasts sums of money, but there's much to the world of investments than multi-million dollar deals. Investors: Avoid These 5 Common Tax Mistakes For many investors, and even some tax professionals, sorting through the complex IRS rules on investment taxes can be a nightmare. Pitfalls abound, and the penalties for even simple mistakes can be severe. Why You Need To Buy and Sell Gold Coins (Part 6) Pre-1933 Gold Outperforms Today's Gold Bullion.. Credit Scores = ROI Profits for Real Estate Investors Strong credit saves real estate investors money on mortgage finance costs. A good credit score, along with the other credit and mortgage qualifications, means that investors can pay lower fees for financing, such as points and interest charges. Quit and Retire Three Years Earlier! For most people, there is a direct correlation between how worried they are about retirement income, and how much they can actually do about it. This is because the more worried you are, the closer you probably are to retirement, and the less time you have to do anything - like save up. Planning Starts with the Basics When developing a plan for your finances, the toughest question often is: "Where do I begin?" Before investing in stocks and bonds or buying life insurance, before implementing any change or making any decisions, you first need to analyze and understand your entire financial picture. Two documents allow you to do just that. Foreign Investing - US Investors Still Missing Out? Investors are still too slowly realizing what the academics have long pointed out -- adding foreign stocks to your portfolio will, over the long term, increase your returns and lower the overall risk of your portfolio.US investors embracing foreign investing are both realists and optimists. The Realities Of Market Timing Market timing systems are based on patterns of activity in the past. Every system that you are likely to hear about works well when it is applied to historical data. The Basics of Tax-Free UK Financial Spread Betting Financial Spread Betting (or Trading) offers a tax free method of speculating on financial markets.Quite simply, if you think a particular index, share, commodity, currency or sector will rise, you place an UP bet. Issuing Warrants to Investors When raising capital for a business venture, warrants are a common form of equity that is given to investors. A warrant is like an option - it gives the holder the right to buy a security at a fixed or formulaic price, which is known as the "exercise" or "strike" price. Just Say NO to Your Stock Broker We have all heard that slogan that started back when Nancy Reagan was in Washington. It was all about drugs. It's Never too Early to Start Investing! Remember the old saying, "never too late to start"? Well, try this on for size: when it comes to investing, it's never too early to start. Time really is of the essence here. Beta Factors: How They Can Be Used In The Current Situation Ever since the turn of the century, world stock markets have been very volatile. In other words there have been significant movements (up or down) in share prices. Planning for Retirement Almost without exception, people don't start planning for their retirement early enough in their lives. Young people leaving High School or College and going into their first paid position find it difficult to look or see ahead to age sixty or sixty-five. Caveat Emptor: You May Owe Taxes Despite 401(K) Losses! One among many ways you lose money in non-indexed mutual funds is the tax trap. You may have to pay taxes even when your mutual fund loses money! To many people this is painfully unexpected. How Eating Bitumen Made Me a Better Stock Trader Stock market trading is a fascinating activity.There are so many layers to it. Delist My Corporation Please It use to be said that once a company was de-listed from the NASDAQ it was the kiss of death, not so any more. With Sarbanes Oxley and all the insane reporting requirements it might save your company from incessant lawsuits from investors and the government regulators who are out to destroy free enterprise.
|
