Aus -
You never cease to amaze me.
First, if we're going to start judging a stock by analyst recommendations (a very dangerous pastime) there are 5 covering IFCI; one with a strong buy, 3 with a moderate buy and now one with a hold. That would seem somewhat optimistic as a consensus.
Regarding the translation of analyst's comments, here's a little Primer 101:
Brokerages divide their analysts into two camps, the "buy side" and the "sell side" These nomenclatures don't mean what they sound like: the folks on the "buy side" are making trades, up or down, for the house. You never, ever hear their advice, it is proprietary and closely guarded.
The folks on the "sell side" are selling their advice to clients, and spouting off via press releases. They do their research and then trumpet forth that a stock is to "outperform", or is a "long term buy" or whatever.
These guys are suspect.
First of all, you have to wonder if their proclamations aren't intended solely to bolster what the secretive guys on the buy side have already traded in. Secondly, when you see advice, it is kind of like watching newsreels that are 2 months old: they are almost always way, way behind the curve.
Roughly translated, here's what sell side analysts comments really mean:
STRONG BUY: You should have bought a week ago.
BUY: You should have bought a month ago.
OUTPERFORM: It may do better than similar stocks, we have no freaking clue.
HOLD: Uh oh.
UNDERPERFORM: We want your commission when you sell this perfectly good stock and buy another, similar stock that is in fact no better or worse in any material way.
SELL: You have already lost major dinero, and now we're covering our butt, like it means anything at this point.
The ONLY legitimate, good sign is INITIATING COVERAGE, regardless of what the ranking is. What this means is that half the world has already discovered this stock, the analyst has been working on his putting game on Tuesdays and Thursdays, and his manager finally chews his ass and tells him to get busy because the rest of the free world is climbing into bed with this thing and we don't even have a prospectus on file.
The best advice is not to take advice, or at least take it with a grain of salt. Sooner or later, and sometimes quite annoyingly later, earnings will carry the day. Growth defies all negativity, including such banal trivialities as poorly worded 4th quarter earnings statements, less than charismatic CFOs, and anonymous posters on public boards who think their words mean something.
IFCI is undervalued, is making money, is growing, and is a major player in a dynamic sector. If one's faith can be shattered by a lone, nattering nabob at a brokerage house, then you have to ask yourself why you plunked money down in the first place.
- Don |
