Prudential's Analysts Told to Just Say `Sell,' Paper Says
Newark, New Jersey, Jan. 19 (Bloomberg) -- Prudential
Securities Inc.'s Chief Executive John Strangfeld is telling his
analysts to stop putting a ``hold'' recommendation on a stock that
should be a ``sell,'' the Star-Ledger of Newark, New Jersey, said.
In his three months on the job, Strangfeld has changed the
brokerage to focus more on consumers than corporate customers, the
paper reported. Prudential has slashed its business that helps
governments and companies finance themselves and is no longer
arranging bond sales or leading new stock sales, the paper said.
``Hold'' recommendations have become the polite way of
telling investors to avoid poorly performing stocks, the paper
said. The practice has eroded the credibility of analysts, who are
seen as catering to companies from which they will later solicit
banking business, the paper said.
Strangfeld vowed the company's research will become more
opinionated and critical, to benefit investors rather than
brokers. He said the brokerage, a unit of Prudential Insurance Co.
of America, will add coverage of large-capitalization companies
whose shares more people are likely to own, the paper said.
(Star-Ledger 1-19 p.41)
For the Web site of the Star-Ledger, see {NJSL }. |
