This sure sucks..
BRODERBUND SOFTWARE (BROD) 26 -2 1/4. Considering the enormous opportunity the Asian financial crisis has created to profit from falling stock prices here in the U.S, why is it that Wall Street analyst aren't being as aggressive at pointing out the potential laggards in their universe as the expected winners? If, for instance, SoundView expects stock A to appreciate 20% and believes that stock B is 25% overvalued, why wouldn't it express that by issuing a sell rating and a downside price target, instead the current status quo -- a downgrade to "hold," citing valuation. Very rarely does one come across such honest analysis. Blame it on the desire to maintain current investment banking relationships with particular companies or to potentially win new ones, the attempt to keep individual investors pouring money into the market on the long-side (i.e into mutual funds), or the unwillingness to play a role in promoting short-selling or put buying. Whatever you chalk it up to, there is no getting past the fact that inherent conflicts of interest prevent analysts from being in the individual and institutional investors' corners in a down market. But there is at least one firm out there that is willing to spit into the wind. Its insurgency was demonstrated earlier today when CIBC Oppenheimer downgraded shares of software maker Broderbund from a "hold" to an "underperform" and set a downside price target of $20 (-23%). At 27x its '98 earnings estimate of $0.96 a share, the stock trades at a premium to its peers. However, most alarming about BROD's fundamentals is that OpCo expects bottom-line growth to stall. In fact, its '99 earnings estimate suggests earnings of $0.96 to be repeated in '99. |
