Thursday, October 04, 2007

The Least Helpful Call You Will Get Today



The Least Helpful Call of the Day today is not even close to the next-least helpful call, whatever that may be.

Today's Least Helpful Call comes from an outfit called Broadpoint Capital, about which we know nothing except that they are downgrading their rating and price target on Nutrisystem, the diet food purveyor whose main customers, based on their incessant TV ads, appear to be former members of the Miami Dolphins.

Broadpoint is acting in response to last night’s news, in which, to use a highly technical Wall Street term—Nutrisystem “blew up,” announcing a large sales and earnings shortfall, causing the stock to collapse 20% in the aftermarket.

Broadpoint is unhelpfully downgrading their rating on the stock this morning—and I am not making this up—from a “Strong Buy” to a “Buy” while simultaneously cutting their price target from $75 a share to $50, according to the indispensable Briefing.com.


How the ultimate value of a business changed by one-third overnight is beyond our ken, not to mention why that purported value is now $50 a share, and not $48 or $51 or $54.

In any event, anybody eager to follow Broadpoint’s latest recommendation on the shares can buy all they want at, oh, $37 right now.


Jeff Matthews
I Am Not Making This Up


© 2007 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

6 comments:

chitownken said...

Jeff,

What's even better is that Broadpoint (the former First Albany, by the way) upgraded NTRI to "Strong Buy" on 10/1/07. Great call on the quarter!

The Inscrutable Chicken said...

Even better is that they have the "fourth best" return on bberg because the 31% they lost you is better than the 47% the three equal-5th placed guys would have lost you.

With Citi being the only big bank on the coverage list, it also shows that it's not just the bulge bracket that give crappy recommendations - these "market savvy, no-conflict" independent houses are just as bad.

buckeye1 said...

That is a pretty bad call. I thought a JP Morgan note today on Charlotte Russe, a teen clothing retailer was amusing. In the note, the analyst says and I quote: "we reccomend that investors stay away from "cheap" stocks." If someone can explain that one so it makes sense, please let me know.

Dan said...

What is your point with these posts? Stocks blow up all the time. And despite your proclaimed inability to fathom a 1/3 change in value of a business over night, it is hardly a six sigma event. Why the whole Chinese market changed value by 30% in just the past 2 months (Is that beyond your ‘ken’ as well?)

And as far as the analyst being wrong on the expected value of the business, well the much more interesting story here is the investors who owned the shares. In your estimation who is the “Least Helpful” - the PMs who bought the NTRI shares for their clients, or Brightpoint’s analyst who issued the downgrade?

Speaking of investors, word has it you may be one yourself – have you ever been so helpful to your investors as to have taken an ownership interest in a company that changed value by 30%?

Maybe I am missing the point here, but this particular running commentary seems remarkably vapid.

climateer said...

We, at Climateer Investing, will be going to an "Underweight" rating, should the stock drop any further, thus confirming in advance our prescience if not our punscience.

Sam E. Antar said...

Sometimes I wonder if we would all be better off is we just threw darts on a board rather than listen to most of the Wall Street analysts.

Respectfully,

Sam E. Antar (former Crazy Eddie CFO & convicted felon who got Wall Street analysts to drink my Kool Aid).