Wednesday, December 17, 2014

Worthless Analysis

Sometimes I am just flabbergasted at what passes for analysis on the internet by people/companies who sell analysis.  Here was the latest head-scratcher (being nice).

Chicago Bridge & Iron (CBI) Downgraded From Buy to Hold

Now let us look at the in-depth thoughts:

"We rate CHICAGO BRIDGE & IRON CO (CBI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 

Wow, talk about saying absolutely nothing.

  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 13.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
I am glad they commented that the revenue growth appears to have helped boost EPS.  I think some actual analysis not written by a computer or someone in Sri Lanka could perhaps be a little more certain about the increase in EPS and the cause.

However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and generally higher debt management risk.

This one kills me. they find "weakness" due to a generally disappointing performance in the stock". Really? I am sure glad they told me the stock has been going down. But does that mean it will go down forever? Does that mean it has gone down too much? Any comment on why it is going down and what might cause that to change. Heck no!  This passes for analysis????

I could go on.  But it is so disappointing. It is like firms that change a stock from a buy to a sell, three days after they post bad results that cause it to drop 20%.  Little late with that call, don't you think?  I wonder how much they get paid?

1 comment:

Paul T said...

Here's another one:

CTRE dropped so much because: $5.88 special dividend. Not because the stock tanked.

It's almost like they automate the whole process and never fact check.