GREY:LCPRF - Post by User
Comment by
LocoToroon Oct 22, 2010 6:19pm
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Post# 17601333
RE: LCC Downgrade
RE: LCC DowngradeAnalyst ratings are far from foolproof - see Pete's take on them
It pays to sell when analysts say 'buy'
Peter Hodson, Financial Post ·
Read more: https://www.nationalpost.com/related/topics/pays+sell+when+analysts/3680716/story.html#ixzz1382K8yyM
........Cowen explains this phenomenon with the following: (1) Stock picking is not priority #1 for stock analysts (their words, not mine!) (2) Analysts often downgrade companies after negative news flow; (3) Rating changes are material events, and analysts may be reluctant to change them; and (4) Favoured stocks have more eyes on them and more buyers, so may be naturally overvalued.
The last point is most important for individual investors. Just because a stock is loved by analysts doesn't mean you should buy it. In fact, much to the chagrin of analysts everywhere, Cowen's research might mean the exact opposite is true.............