Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (12325)	2/21/1998 12:53:00 PM
From: waverider	Read Replies (2) \| Respond to of 95453

Upgrades/Downgrades: Paul, granted that analysts are basically useless and companies want to avoid lawsuits, what is your perspective on the current oil service situation? Most of the estimates put our stocks under PEs of 10 (or a bit higher) for forward earnings...very optimistic. And the companies themselves are saying everything is great for 1998. Either we are setting ourselves up for the biggest lawsuit party if things go haywire, or we'll all be ready to retire by the end of '98. What say you? Diamond H

To: Chuzzlewit who wrote (12325)	2/21/1998 1:33:00 PM
From: Broken_Clock	Read Replies (2) \| Respond to of 95453

Paul, re: analysts I know a CEO of a nice sized tech company(on Fortune's Top 500 Fastest Growing list). He is a good friend of my wife. I had an interesting conversation with him regarding earnings, analysts, etc. Bottom line....He learned the hard way that to succeed in keeping your stock in line with market valuations then you had better meet or exceed the consensus. They spend well over $1,000,000/yr just with specialists in the accounting Dept. in order to do just that. The analysts don't seem to care whether the company is sound or not ....the focus is on the meet or beat #s. He missed by 1 cent a couple years ago and the stock went from 42 to 12 in 2 weeks.The company is bigger, less debt, did acretive aquisitions and has met or exceeded #s every quarter since the penny miss. They are back up to the mid 20s but it's hard to erase the perception in the minds of the analysts that was created by the one miss. That has cost the company at least 1 billion in stock value which could have been used for further aquisitions. His perception is that it's a game and the company will do everything it can to win. The analysts are happy cause they always look good when the company meets or beats which gives them job security. Interesting and true story. PK

To: Chuzzlewit who wrote (12325)	2/21/1998 2:22:00 PM
From: RGinPG	Respond to of 95453

I agree. I think another reason analyst numbers are less useful than they may have been in the past is that they are so widely known. With the information age, everyone who takes investing seriously knows what the analyst have been saying. But you gotta follow somethin right? I think the key is knowing the industry and the ability to identify trends, to this end, analysts numbers can be a useful tool.

To: Chuzzlewit who wrote (12325)	2/21/1998 5:40:00 PM
From: Czechsinthemail	Respond to of 95453

Paul, While the analysts are far from reliable, I wouldn't completely discard them as useless. They do provide a useful function in providing a measure of expectations and changes in expectations. And they are often helpful in providing at least some explanation of a company's or an industry's predicament. Granted there is generally a built-in bias toward the bullish, but they do serve as conduits of information about the companies they cover. They may not be great analysts or even good analysts, but they are the only analysts we have. I think the trick is to find the useful information and do your own analysis. Baird