After the stock has fallen from above 60, they downgrade it at 42. Wow, what a great call!
Let's see-downgrade a stock when it is cheap, get all of your brokers that have retail accounts that own the stock to sell to Prudential's trading desk, the traders get long the stock, a few months pass, the company's prospects improve, they write a bullish report now with the stock above 50 again, and they sell out their position for a $10+ profit.
Wow, these Wall Street guys are great and ethical too!
Is it just me, or does a stock only get downgraded near its low?
You are so correct. If you go back to most stocks near their high they all have strong buy ratings. They put out rosy articles. Then near the low they issue sell ratings. COLM will probably go down a few mre points but the value is much higher. 3-6-12 months down the line things will change especially when the company is buying back at such a wonderful rate. The lower the stock goes the better the buyback value. In the end you get a point where the stock will have to go up, or the company will be buying back 50 percent a year.
Good to see someone with a brain here on the board.
The other point I always make with analysts--if they were good, why wouldn't they go run money in a hedge fund?
There is plenty more to make there. Thus, being a career analyst is a process of adverse selection-the good ones leave to run money and the bad ones stay because they have no better options.
It amazes me that people still listen to analysts at all, as though what they have to say is important. Like anyone in the market, they write their reports with a slanted viewpoint.
If their trading desk is long the stock, they are bullish. If they want to buy (like in this case) at a cheap level, they are bearish.
Once the stock desk buys their half-million or million shares, you won't hear from them again. When the stock is above 50, this same analyst will write a bullish article and upgrade the stock. The trading desk will dump their shares, the retail guy will buy the stock at or near the high, and the process will repeat itself.
In the end, the trading desk will make $10 per share and the retail investor who listens to analyst will be left holding the bag.