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Identifying Questionable Downgrades on Stocks

Alexander P Morris — Tue, 28 Feb 2012 21:32:26 +0000

(TheReformedBroker) “When stalking a growth stock awaiting better entries or looking for new growth stock ideas, one of the best things you can do is get a hold of Wall Street’s Upgrades and Downgrades each morning. .. Typically a fast-growing company will stumble on a specious analyst downgrade and then the accumulation will resume as the institutional fans of the story get over it and come back with buy orders.”

Examples of B.S. downgrades:

“Valuation - growth stocks don’t trade on ‘valuation’, they trade on sentiment and the expectation of future earnings, see the numerous valuation-based downgrades of lululemon and Whole Foods.

Dropping Coverage - believe it or not there are institutions who will actually sell on the news that a brokerage firm is dropping or suspending coverage in a name due to an analyst leaving or something.

Channel Checks - there is only one thing sell-side analysts suck more at than tackle football and that is ‘channel checking’ – they literally cannot do it in such a way that there are actionable insights to be gleaned from it. Think about how many times you heard about strength in non-Apple tablets (there never really was any) or weakness in the iPhone 2 (also, never really happened). Channel checks are a money-loser in most cases – wait for the actual hard data, forget what people say they’ll do or think they’ll do.

Short-Term Pressures - chances are if you are interested in a growth stock investment, what happens tomorrow or the next day has little to do with anything. For example, I saw an analyst downgrade Buffalo Wild Wings, one of this moment’s greatest growth stories, because of a rise in chicken wing costs in early February. And while the analyst was correct in terms of those costs rising, it’s really a trivial, short-term matter to anyone who intends to invest in the business.

Strategic Direction - some people are meant to run businesses and others are meant to analyze and critique them. When a company announces a new strategic direction or goal, the knee-jerk Wall Street response is to cut it to neutral due to ‘uncertainty’. I have no interest in seeing sell-side analysts vote on the strategic decisions of a company – management often knows more about their market than the eggheads do.”

Full Story: Growth Stock Strategy: Buy Bullsh*t Downgrades (TheReformedBroker)

Stocks Declaring First-Time Dividends Strongly Outperform Market

Alexander P Morris — Wed, 01 Feb 2012 17:53:47 +0000

(DynamicDividend) “If the data I’ve collected over the last six months is any indication, a very strong case can be made for the initiation of a dividend as a signal that a stock is about to generate market-beating returns.”

“Of the 36 stocks listed, only three are currently trading lower than their final closing price prior to declaring their first payout, and only seven have been outperformed by the S&P 500 since the same announcement. The average gain by the new dividend stocks (22.75%) is an absurd 15.67% better than the average gain by the S&P 500 (7.09%) during comparable periods.”

“Some highlights include: SMF Energy gaining 182% (vs. 17% for the S&P 500), Ebix gaining 58% (vs. 12%), Intuit gaining 40% (vs. 14%), Xyratex gaining 68% (vs. 2%), and Emcor Group gaining 53% (vs. 16%). Solutia has popped 77%, thanks in large part to Eastman agreeing to pay a 42% premium for the company last week.”

Full Story: New Dividend Stocks Absolutely Crushing Broader Market (DynamicDividend)

DynamicDividend.com is a terrific source of all types of dividend-related news and information, including lists of “Dividend Dynamo” stocks that have had the longest run of annual consecutive dividend growth.

Stocks from List: NRGM, RRMS, ZMH, A, ESIO, CSPI, FMCN, GNE, KNSY, SOA, FBNK, GFF, IACI, NOR, LXK, PCTI, OILT, CORE, ACFN, HSNI, EME, HL, PRA, EBIX, WWAY, NICK, CECE, INTU, CGI, NMFC, KINS, DSW, FUEL, AMOT, JCOM, XRTX

(read more...)

What’s Interactive Brokers Really Worth? Watch IPO IBKR’s First Day Trading at The Speed of Light

Alexander P Morris — Sat, 05 May 2007 22:00:00 +0000

Interactive Brokers’ highly anticipated IPO was released on Friday. You can watch its entire first day of trading during the video. The initial red herring called for 20M shares to be priced at $23-$27 per share. Due to heavy demand, the quantity was increased to 34.5M shares at a projected $27-$31 per share. The IPO was finally priced via WR Hambrecht + Co’s OpenIPO auction process at $30.01 per share for 40M shares, double the initial expected quantity. So, for the real question… What is Interactive Brokers worth versus its peers? Stocks mentioned: NASD:IBKR, NASD:ETFC, NASD:AMTD, NASD:SCHW, NYSE:GS

Murphys Law and the Bittersweet Taste of a Trading Debacle

Alexander P Morris — Mon, 23 Apr 2007 22:00:00 +0000

I wanted to relate to you a small trading debacle I managed to get myself into last week. See how I handled it, and what I did to further minimize the chance of it happening again. Learn why you should never double down on a trading mistake, and the bittersweet taste of being both right and wrong at the same time…

How to Win the Million Dollar Challenge :: Trading with the Stars

Alexander P Morris — Mon, 16 Apr 2007 22:00:00 +0000

Welcome back to another Celebrity Filled Hotroastin’ mo Money episode of “Trading with the Stars”! Some of you may recall a few weeks back when Vienna Marriott gave us a few of her picks for CNBC’s “Million Dollar Challenge”. However, we had no idea how well they would actually perform. Today she shares with us some of her secrets, introduces us to Alexander’s new ebook, “How to Win the Million Dollar Challenge”, and shares with us a few new interesting stock picks to check out! Stock mentions: NASD:CHAP, NASD:NBIX, NASD:SBGI, NYSE:CHD, NASD:ONXX

Learn The Reasons Why the DOW Dropped 250 Points in One Minute

Alexander P Morris — Mon, 26 Feb 2007 22:00:00 +0000

Wondering why the DOW ($INDU) was able to suddenly drop 250 points in one minute today off an already rather abismal trading day? Learn unique perspectives on some of the most likely reasons behind the panic….

The “smallest” loss with NYSE:JNJ giving up about 2.01% for the day, with NYSE:DIS down the most, giving up 6.29% for the day. NYSE:VZ held a close second at -5.57%.

Definitely check out the notes/transcript section for this video, as there is quite a bit of very interesting additional info presented… a man named Martin Armstrong years ago predicted February 27th, 2007 to be a turning point in the business cycle.

NYSE:MFW – Clues to jumping aboard a steady moving trend

Alexander P Morris — Wed, 20 Dec 2006 22:00:00 +0000

M&F WORLDWIDE (NYSE:MFW) trended so strongly today that I felt I just had to release a vlog to discuss the price action… Let’s see what we can learn from these types of trading patterns and behavior. You’ve also gotta see what happened the next morning!
A good example of PRE-MOMENTUM trading.

Manchester Inc. – trading the amazing stock that doesn’t go down – and what Amaranth should have known

Alexander P Morris — Thu, 05 Oct 2006 22:00:00 +0000

Manchester Inc. (OTCBB:MNCS)… Manipulated? Controlled? The price action is unbelievable and such perfectly steady moves are nearly unheard of. What can we all learn from not only this freak-of-nature opportunity, but from the Amaranth hedge fund blow-up as well.

Be sure to check out the Notes/Transcript section for updates on MNCS… It doesn’t go down… until it finally does… then watch out! Remember Jesse Livermore’s old adage, when the markup’s over, it’s reeeealllly over.

Owens Corning – Update on Bankruptcy Case

Alexander P Morris — Tue, 30 May 2006 22:00:00 +0000

Owens Corning has finally gotten a definite figure on its asbestos liability claims, and also offers an olive branch to existing shareholders… But is it worth investing in yet?

Owens Corning – Great Play on Asbestos Bill or Bust?

Alexander P Morris — Wed, 26 Apr 2006 22:00:00 +0000

Owens Corning, a once solid company that was forced into bankrupcy due to asbestos litigation, has recently seen its stock (OTC:OWENQ) trade as high as $5.50/share to as low as $1/share on speculation that Congress will pass the asbestos bill. So, is this really a good asbestos play? Or are investors missing one key point…