A message to new investors...
I'd just like to take a little time here to grind my axe. Years
ago I used to read stock recommendations thinking that the
authors must know what they're talking about (why else would they
print this stuff?). Of course, being a newbie I got sucked into
some of it. The penny stocks are the easiest way to get sucked
in. It's the lure of making 1000% within a year, etc. So, you
lose a few bucks (maybe more) and smarten up. Maybe you learn
a bit about technical analysis and decide that there are many more
companies out there, whose charts are actually going up, that you
want to take advantage of. Forget penny stocks...let's try buying
some quality stuff, right? Well, of course the market "literature"
has its share of buy/sell recommendations on bigger companies. So,
why not read a few recommendations and take a chance. Afterall,
if they're going to talk about the bigger companies they obviously
must know a little bit about what they're talking about right?
WRONG. Know what? Some of them don't know sh!t.
How can you tell? It's the purpose of this thread to talk about
momentum, whether it's positive or negative or just not there at
all. Understanding the momentum of a stock can sure help weed
out which of these newletters know what they're talking about.
Over the last long while I've tracked "The Investment Reporter" on
a number of their buy recommendations. Their advice on many stocks
is simply shameful. I wanted to take one example here and show
how ugly it can get for those who refuse to appreciate relatively
simple TA concepts like momentum.
Here's the company: Laidlaw [LDM:TSE]
Chart: chart.canada-stockwatch.com
Now read the number of "buy" recommendations that "The Investment
Reporter" has made over the past year. To me this is truly sick
to read. I pity those people who took every recommendation to buy
seriously. "The Investment Reporter" could have saved these
people a lot of money just by allowing the negative momentum of this
stock to dissipate before issuing so many "buy"s, or to issue "sell"s
when the momentum really turns sour...
Laidlaw Inc LDM
Shares issued 330,156,836 Mar 31 close $22.55
Tue 31 Mar 98 In the News
The March 27 issue of the Investment Reporter says buy. Now that Philip
Services failed to obtain shareholder approval of its bid for Safety-Kleen,
Laidlaw Environmental Services, a subsidiary of Laidlaw ($21.50), can
pursue its $2 billion bid for the company. Safety-Kleen, a hazardous waste
company, previously rejected Laidlaw Environmental's hostile takeover
offer, but there is no comparable alternative now. A successful bid would
dilute Laidlaw's ownership of its subsidiary and it would not have to
consolidate its financial statements with Laidlaw Environmental. As a
result, $535 million of the subsidiary's debt would be removed from
Laidlaw's books. With a stronger balance sheet, Laidlaw may make further
acquisitions. After 38 acquisitions in 1997 the company expects purchases
to slow as it focuses on consolidating new businesses. The decision to
refocus on transportation should result in stronger growth. Laidlaw hopes
to raise revenues from $4.2 billion in 1997 to $5 billion by 2000.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 329,575,236 Apr 24 close $19.85
Mon 27 Apr 98 In the News
In the April 24 issue, The Investment Reporter lists 25 stocks it predicts
will continue to be outstanding performers for the balance of 1998. Laidlaw
($22.50), is one of these companies. The Reporter says Laidlaw should
report stronger results as it consolidates its new businesses. Buy.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 329,773,736 May 21 close $18.85
Fri 22 May 98 In the News
In the May 22 issue, The Investment Reporter says that Laidlaw's $19.40
stock price declined after it reported mixed results in its second quarter
ended Feb. 28. Although earnings at its ambulance operations did not meet
expectations, overall profits were up. The Reporter thinks Laidlaw should
be able to improve results at its ambulance business. Buy.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 329,773,736 Jul 22 close $15.85
Wed 22 Jul 98 In the News
In the July 24 issue, The Investment Reporter notes that Laidlaw's share
price ($15.45) has dropped more than a third from its 52-week high in
March. According to the Reporter, the decline started because of lower than
expected second quarter profits. A further drop occurred when Laidlaw lost
a U.S. tax ruling that could cost it up to $500-million (U.S.). The
Reporter thinks the price-battering has been overdone, especially since
Laidlaw has already reserved $200-million (U.S.) for the situation. Third
quarter results, ended May 31, 1998, saw income from continuing operations
rise 21 per cent over the same period last year. The Reporter says Laidlaw
is a well-managed company with solid cash flow growth in steady,
non-cyclical businesses which offer considerable growth opportunities in
the U.S. In the July 18, 1997 issue, the Reporter recommended Laidlaw as a
long-term buy at $19.00. At its current price, the Reporter thinks Laidlaw
is an under-valued buy.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 329,773,736 Sep 1 close $13.95
Wed 2 Sept 98 In the News
In the September supplement, The Investment Reporter says that according to
The Stock Trader's Almanac, markets which rise during September tend to be
bearish in the following year. The Reporter, however, expects the opposite.
September markets may continue to fall as currency crises spread around the
globe. By the end of the year, however, markets may be poised for a rally.
For now, the Reporter says be cautious when buying and stick to its best
buys, like Laidlaw ($14.40). Despite the fact that Laidlaw has suffered
from recent setbacks and its price has steadily declined since the
Reporter's first buy recommendation this year at $22.50 in the April 27,
issue, the Reporter believes that given its solid, long-term growth
prospects, it is undervalued. Buy.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 329,773,736 Oct 16 close $14.80
Fri 16 Oct 98 In the News
In the Oct. 16 issue of The Investment Reporter, the investment planning
committee lists 25 stocks it believes will outperform the market for the
balance of 1998. Laidlaw ($14.50) is one of these companies. The Reporter
believes Laidlaw has good growth prospects in the medical outsourcing and
school bus transportation fields. Buy.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 329,773,736 Oct 22 close $14.25
Fri 23 Oct 98 In the News
In the Oct. 23 issue, The Investment Reporter notes that at $14 Laidlaw's
stock has dropped almost 40 per cent from its 52 week high of $23.40 in
March. The Reporter said buy LDM in its March 27 issue and continued with
monthly buy recommendations, stating that the stock was undervalued.
Concerns about slowing profits from the ambulance division as well as a
U.S. tax ruling sparked the decline. The tax ruling, which could cost up to
$500-million (U.S.), maintained that certain deductions for interest
claimed through a Netherlands-based financing vehicle were not deductible
for U.S. tax purposes. Laidlaw will appeal the judgment and the process
could take 12 to 18 months. Laidlaw has already reserved $200-million
(U.S.) for the situation. As a result, the Reporter thinks the stock has
been oversold. With its shares trading at about 12 times estimated earnings
for fiscal 1998 and one times book value, the Reporter believes LDM is an
undervalued buy for above average, long-term growth.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 330,156,836 Dec 2 close $15.35
Thu 3 Dec 98 In the News
In the Dec. 4 issue, The Investment Reporter notes that market performance
during December usually follows the momentum gained or lost in November.
Since markets moved up this past month, the Reporter believes they may
continue to rise in December. Although economic prospects look better now
than they did earlier in the autumn, share prices may already reflect this
good news. The Reporter advises caution and says buy gradually. Laidlaw
($16.30) is a December Best Buy for growth. The Reporter believes that
Laidlaw stands to gain from its Greyhound lines acquisition and that it is
undervalued. Buy. The Reporter has been predicting improved results since
the share price started to slide from its 52 week high of $23.50 in March.
There have been nine buy recommendations since then, the highest at $22.50
in the April 24 issue and a low of $14 in the Oct. 23 issue.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 330,156,836 Dec 24 close $15.45
Tue 29 Dec 98 In the News
In The Investment Reporter dated Jan. 1, 1999, the Investment Planning
Committee offers a list of 25 stocks it believes will be outstanding
performers in 1999. Laidlaw ($14.50), which, in the Reporter's opinion,
offers solid growth potential through its school and passenger busing
operations, is one of these companies. Laidlaw was one of the Reporter's
best buys for growth at $16.30 in the December 1998 edition.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
Laidlaw Inc LDM
Shares issued 330,156,836 Mar 15 close $9.55
Tue 16 Mar 99 In the News
In the March 19 issue, The Investment Reporter says that despite the drop
in Laidlaw's share price ($9.85), it still believes that the stock is
undervalued and is still a buy for patient investors seeking long-term
gains. The stock fell on the news that second quarter profits would be
below analyst's expectations. The newsletter says that is because of
trouble at the company's ambulance division where U.S. health care reforms
and problems related to integrating the diverse operations of the division
have put pressure on profit margins. Laidlaw, though, is taking steps to
restructure the division into five more efficient geographic units. With
healthy cash flows from its core school bus operation and a good balance
sheet, the Reporter thinks the company is well-positioned to restructure
its ambulance division. Given that the restructuring should take time,
however, the stock may remain under pressure over the near term. In the
Jan. 1, 1999 issue, the Reporter predicted Laidlaw would be an outstanding
performer in 1999 and recommended buying at $14.50.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
Disgusting isn't it?
Thanx for allowing me to vent.
WN |
