GS reaching for straws on ZION?

Discussion in 'Stocks' started by nitro, Dec 22, 2008.

  1. nitro


    Goldman downgraded ZION, saying it would lose bulk on their next year earnings. My question is, is Goldman reaching for straws here?

    "Zions Bancorp. (ZION) opened at 24.26. So far today, the stock has hit a low of 19.66 and a high of 25.44. ZION is now trading at 20.22, down 5.47 (-22.55%). The stock hit its 52 week high of 81.43 in July and set its 52 week low of 19.66 today. ZION has been dropping for the past year. Zions shares have been taking a hit after a Goldman Sachs analyst downgraded the stock to "Sell" and said it expects U.S. regional banks to continue to face heavy losses as cost of capital rises and credit conditions worsen. The broker also lowered his 2008 earnings estimates. Technical indicators for the stock are bearish and steady while S&P gives ZION a negative 2 STARS (out of 5) sell rating. If you’re looking for a hedged play on this stock, consider an October bear-call credit spread above the $35 range. ZION stock could rise up to 73.1% before expiration and this position would still be profitable. [RHF - Seven Summits Strategic Investments NewsBite]"

    NOTE: We have a small position in ZION.
  2. nitro


    ZION options + underlying not just underlying.

  3. Sell ratings often mean that the rater believes the bottom of the price action has been found and doesn't expect the company's shares to fall more.
  4. =======================

    True & sometimes a stock shrugs off sell ratings.

    And in a bear market, even Morgan Stanley calling ''Citigroup the short idea of 2008'', can be beginning of a good downtrend:cool:
  5. I have to find the exact percentages again, but I read in a Zack's book that if you were to buy all stocks with a buy rating and sell short all with a sell, you would be astonished at how much money you would lose. If you did the opposite, you'd find yourself to actually be profitable. That's because Buy typically means, over bought or at the top of its value, and sell the opposite. I think Analyst reccomendations are great once you learn how to decode them.