Rather than actually listen to the whole conference call, investors can now just gauge the tone of the analysts on the call and listen for what types of questions they ask. You'll end up learning more about what direction the stocks is going than spending hours digging into the stocks financial statements or trying to figure out if that's a head or shoulder in the stock chart. Well, at least that's what Jordan Schoenfeld
, a PhD candidate at the University of Michigan's Ross School of Business, found out:
He found that when analysts' tone is more upbeat than usual, a company
Tagged analysts tone, conference calls, downgrades, jordan schoenfeld, types of questions, upgrades
Everyday, analysts from Bank of America to Barclay's Capital to Bear Stearns (oops, Bear no longer exists), make stock upgrades and downgrades. These downgrades or upgrades or better stated, stock recommendations, fall into a few categories: from a simple BUY to a NEUTRAL to an OVER WEIGHT to a STRONG BUY.
Once in a bloom moon you'll see a SELL rating, but that's extremely rare. This language has become stale, though. It's a bit boring and ineffectual. However, refreshingly, going forward, analysts will now use some new terminology in their stock ratings that investors might glean more insight from. Here's a
Tagged analyst ratings, downgrades, new terminology, stock recommendations, upgrades
Perhaps one of the more comical things that takes place in the stock market is how financial companies that are on the brink of bankruptcy or at least going through their own troubles, like to downgrade or cut the estimates of other companies.
For instance, just today, the Jefferies Group (JEF), whose own stock was at one point halted after it dropped 20% in a flash, downgraded and or cut the estimates on EZchip, Smith Micro, and Molson Coors.
How can a company who is highly leveraged come out and say one company or another has their books in order? How can
Tagged crash, downgrades, jef, jefferies, upgrades