If you want confirmation that Prudential is lying thru their teeth so the bastards can accumulate AUDC, take note of when they LAST downgraded AUDC on January 10, 2001 (THE LOW in that cycle) IMMEDIATELY BEFORE AUDC WENT UP ALMOST 200%!!
biz.yahoo.com
Note the time of the Briefing.com link on that day was 6:00 pm, but the briefing.com posts are end-of-day summaries for downgrades which occurred during that day. The Prudential downgrade to Accumulate came out before the open, along with Merrill's downgrade to NT Accumulate.
Note that on 1/10/01, AUDC had closed at $9.21 the day before. From that level AND IN SPITE OF PRUDENTIAL'S DOWNGRADE THAT DAY, AUDC shot up almost 200% IN JUST THREE WEEKS to $25.75 by 1/31/01. I don't know how Prudential could have made a call more incorrectly than that! Fortunately they're not managing my portfolio.
See the AUDC Chart showing the meteoric climb from its January 10 cyclical low:
stockcharts.com[l,a]daolyymy[dc][pc50!c200][vc60]
In making that wholly incorrect call, Prudential was either acting like a bunch of amateurs, or they downgraded on 1/10/01 because they wanted to accumulate, which is the typical motive when downgrades occur at market lows for an equity.
Anyhow, YOU take your pick: Amateurs or Dishonest Accumulaters?
I'll give Prudential the benefit of the doubt and say they weren't amateurs... Rather they were slick, dishonest accumulaters.
If Prudential is ostensibly a credible firm whose advice we should trust, where was Prudential when AUDC hit $25.75 on January 31, 2001??? Why didn't they take that opportunity to take their rating down from "Accumulate" (implicitly a "sell") to "Sell" (explicitly a "sell")??? Instead, they chose a market bottom and an AUDC cyclical low this week to downgrade AUDC. Losers.
In summary, Prudential Analyst Randy Scherago's downgrade is a good sign because, just like last time, these guys are accumulating. They like a profitable company trading near book value in this environment.
Everybody knows that analysts of dishonest firms downgrade at the bottom and upgrade at the top. Prudential is no different.
Do you really think they're a public service company out to protect your ass with their free advice? Of course not, they're in this to make profits by generating enough buy interest when they want to sell at the top and generating enough sell interest when they want their clients to buy at the bottom.
Next downgrade should be for Prudential itself. Hopefully Randy Scherago will be one of the many brokerage employees being given pink slips.
AUDC will be over $10 next week. |
