I don't construct those models. I leave that to the analysts. As much as people like to diss them, the good ones earn their money in my mind.
Mike,
a big wall street firm was looking for an analyst. Each applicant was asked the same question, "how would you arrive at your recommendations?"
The first applicant was a value guy, he went through all explanation about earnngs, book value, cash flow etc etc.
The second applicant was a TA guy. He went all the charts, momentum, on balance volume etc etc.
The third applicant simply answered, "what recommendations would you like me to arrive at?"
Guess who got hired.
The reality is all the analysts are worth their money, to the ones who hired them. There is a recent example. One influential analysts who worked for a very influential wall street firm was replaced recently, after saying negative things about the tech sector for the eighth time in the last six months. His replacement, for the same firm, has not said anything but the sky for the tech sector since. This should not be too difficult of a guess. One beer at building K for the correct answer.
I agree that most analysts know what they are doing. Unfortunately, most of their reports are not widely available to non-customers (and why should they be). Further more, even fewer would bother to read the contents, just the heading that said Buy Strong Buy Accumulate Above Average or, for only 6% of all stocks covered, SELL.
This thread has covered more reports in detail than all other threads I have read on SI. Most are so happy to get an upgrade that no attention is paid to the reasons. We have dissected reports by Tim Luke, Alex Cena and not the mention that Crabby guy.
Finally, I think the 1.7 book-to-bill was a meaningless number that Sulpizio threw out just to tell the world how well they well doing. If I remember correctly, it was for handsets (or was it for the ASICs?). I am not aware of anyone else in the industry that use b-t-b as an indicator. It would be a mistake to use that for any purpose related to revenue or earnings.
Ramsey |
