Brokers are going crazy!!

[Rainmaker2000]

Does anyone have any stories to share about absolute garbage analysis from the brokerage houses lately?

Many of them are still trying to justify price targets they set before the correction. They are having difficulty with basic reasoning.

For example, see if you can check out Comsec's analysis of JST Group and the takeover offer (I can't paste it for copyright).

Basically, they have a valuation of $4.75.......they then go on to say how the takeover bid is opportunistic and undervalues JST substantially......and advise not to accept the bid which they price around $4.05 to $4.50....they then show data which inicates that the bid is more valuable, the more shares Premier acquires

They then say that its unlikely in the current environment that the JST share price will go up.........so they recommend shareholders "Reduce" on market anywhere over $4........this is a company under a takeover offer about to pay a fat dividend

So much for long term investing based on fundamentals.....

 

[Wysiwyg]

It is after all only someones opinion/view of a company and their perceived value.I know what you mean though, "professional" viewpoints should be more credible, and it does make me wonder what the ulterior motive is when the professionals are often distant from the reality.

When doing our own assessments (using all information) l find a happy medium and am wholly responsible for the action i take.

Thanks for bringing this observation up.




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[Rainmaker2000]

That's good comment....

My general frustration with the professionals is that so many of them use exact dollar and cent valuations but also use very short term processes of logic... so valuations literally change massively every 3 months with changing sentiment.....

It is a shame because their are so many excellent financial sector operators but many more no so good operators..........there is no way the average consumer can tell the difference

 

[Pager]

I tend not to pay much attention to it any more, also disappointed with the lack of sell recommendations they put out, but I think that’s what either hold, neutral or underweight means, none of the analysts want to use the “S” word.

Remember with AFG not so long ago many brokers had it as a buy with targets of $9 to $10, after it got smashed down to $3 the same brokers had reduced there targets of $4 to $5 but still no sell recommendation, then it got smashed again and was below $1, some of the same brokers were then putting out a speculative buy on it, never saw any mention of previous research.

 

[Rainmaker2000]

That's a really important point Pager....past recommendations and performance is rarely discussed and disected openly by the 'professionals', the whole 'corporate memory' is almost nothing........they just move on.....the whole concept of learning from mistakes is deemed irrelevant.......they just smooth their 'share price targets'.....Consumers use these guys obvioulsy not on the basis of the past, because that is not publicised but more so, because these guys 'are the experts.'

 

[Julia]

It's not unusual to see on FNArena recommendations by six different brokers, all different, and everything from a Buy to a Sell!

Btw a Hold/Neutral is not the same as a Sell. Means just what it says.

What especially annoys me is that so many of them slap a "Buy" on something just because it has dropped in price! Most of them appear to have little regard for the actual SP movement which, after all, is really what matters.