1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Dr. Paul Price
Dr. Paul Price
Articles (500)  | Author's Website |

Further Proof: You Can't Believe Brokerage Research

August 30, 2012 | About:

Brokerage analysts are always looking for an edge to show they offer "value-added" information. If you’re not paying strict attention you might think they did. Here’s yet another example of how the cheating occurs.

Sterne, Agee & Leach made a bold call early Wednesday morning. They predicted Jos. A. Bank (NASDAQ:JOSB)'s earnings would rise and they loved the shares at the current $41.63 price. As Will Shakespeare’s Hamlet once said, “Ay, there’s the rub.”

josb-barronscom-update-aug-29-2012-sourc

As it turned out, JOSB had already reported, and Reuters had broadcast JOSB’s much better than expected earnings and same store sales. Their shares were up 13.5% in premarket trading.

josb-reuters-report-aug-29-2012-source-r

JOSB had a gap opening at $48.00 – up $6.37 or 15.3% from Tuesday’s close. Nobody could buy the stock today at anywhere close to the price where Sterne, Agee & Leach will take credit for putting on their recommendation.

Anyone silly enough to act on their research blurb by buying at the open was down 1.17% by 4 p.m.

Why did Barron's lend their good name to this deceptive press release?

The day’s range was $47.29 to $49.48 with the intra-day low coming with just minutes to go. The chart speaks for itself.

josb-5-day-chart-source-morningstar.jpg

About the author:

Dr. Paul Price
http://www.RealMoneyPro.com

Visit Dr. Paul Price's Website


Rating: 4.1/5 (20 votes)

Comments

superguru
Superguru - 3 years ago Report SPAM
But if analysts are making such big bucks, then some one is finding their work useful and paying for it. Correct?

Who are their clients?

Dr. Paul Price
Dr. Paul Price premium member - 3 years ago Report SPAM


The analysts' real clients are their employers. That's who pay them.

Fudging performance numbers makes them appear more successful and can lead to bigger salaries.
Cogitator99
Cogitator99 - 3 years ago Report SPAM
Good find.
motivator
Motivator - 3 years ago Report SPAM
Wow, average people being hustled by the powerful/better informed. I'm stunned! >.<

Please leave your comment:


GuruFocus Mobile App


User Generated Screeners


DBrizanaapl & brk beater
kazuMomentam
DBrizanblank customized 29Jul2016
timschenkscreen 28 juli 2016
kkopacz.bizForwardRateOfReturnConsumrDef
jtepper2Beneish+Sloan+AZ
jtepper2Beneish+Sloan
DBrizanUSA Holdings 27Jul2016
DBrizanCDN watch 27Jul2016
DBrizanCDN 27Jul2016

Select portfolio(s):

  • Loading...

Why you are interested?

Your selection and notes will be stored in your portfolio.

Login to add portfolio
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK