Great research calls

03/18 08:47 Expedia Inc. Cut to `Hold' at Legg Mason :EXPE US
Expedia Inc. (EXPE US) was downgraded to ``hold'' from ``buy'' by analyst Thomas S Underwood V at Legg Mason Wood Walker Inc. The price target was raised to $40.00 per share from $37.50 per share. More...

 

Are you being facetious, or do you actually regard that as an example of great research?

I have no opinion on the company either way, although I find it difficult to "trust" being long stocks -- for long periods (6 months+) -- during a bear market that is yet, I believe, to reach a bottom.


I also love those cute "price targets" analysts like to attach to their research. LOL.

 

The stock is up 7.57 on a takeover by USAI, which already owns a big chunk of it. I guess I'm being a little unfair to the analyst, but he would be a good candidate for one of those "Want to get away" TV ads.

 

Oh, I just had a look. It's trading at $46. LOL. So much for his 'price target'.

 

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90% of these "analysts" know diddly squat. They are 50/50 on their accuracy. The other 10% just use inside info.

You should have noticed that from the tech bubble. Personally, I never look at anything the analyst says if it is even somewhat opinionated (like projected growth rates). But research reports are good for basic factual info and numbers.

 

From the WSJ:

...But analysts refuse to bend to reality. Of the companies in the Standard & Poor's 500-stock index, analysts expect 345 of them to boost their earnings more than 10% a year during the next three to five years, and 123 companies to grow more than 15%, according to Multex, a stock-market-data firm.

...Not surprisingly, the glow is rosiest in the technology sector. Of the 91 tech companies in the S&P 500, analysts expect 82 to grow faster than 10% a year, and 18 to grow better than 20% a year, meaning tech companies account for more than half of the index's 35 top growers.

...These overly optimistic growth estimates also show that, even with all the regulatory focus on too-bullish analysts allegedly influenced by their firms' investment-banking relationships, a lot of things haven't changed: Research remains rosy and many believe it always will.