Yes, definitely. I mean, I just said the required rate of return because, from how I see, they are pretty much evaluating the riskiness similar to the others, I don't believe those required returns vary that much from one analyst to another. The point of the question was more of a clarification regarding the value creation. During the short period I've been investing (around 2 years, so almost nothing) I've never seen a post on the internet saying that X company beating the earnings forecast consensus is "not what it appears to be", if you know what I mean. This leads me to think that, like you said, "to do your own DD", people who didn't do their own DD might just see a company beating their earnings and thinking it HAS TO BE a good sign, when actually it could very well mean they just beat the earnings forecast which were not as optimistic and maybe the company didn't even create value. I believe 95% of the time it is a good sign, but again, it is worth being certain because sometimes things are not what they appear to be, and seeing a company beating forecasts after forecasts could skew your judgement to one way or another. Idk, it's something very specific, but I thought it could be worth the reflection.
Best,
Marco. |
