I’m calling BS on Janney Capital & Barron’s
Wall Street analysts may not rank as low for "trust" as used car salesmen, but some of them are doing everything they can to attain parity.
Nike (NKE, Financial) closed at 4 p.m. on Thursday, Sept. 25 at $79.75.
Just minutes later Nike reported quarterly results that were well ahead of all estimates. This excerpt from the Business Wire alert shown below was time-stamped at 4:15 PM.
That superb news sent NKE shares surging in aftermarket trading. The stock gapped even higher pre-market last Friday morning. The opening print on September 26 came at $87.98, up $8.23 per share [+10.3%] from the previous day’s official closing price.
There is no shame in being wrong on a stock. What is unacceptable is to pretend you bought, sold or changed your opinion on it at a price that was no longer available in the real world. That is exactly what Janney Capital Markets and Barrons.com did during the past week.
Janney’s analysts said they were forced to move their opinion on NKE from Neutral to Buy after seeing the quarterly news. They indicated a change in their "fair value" estimate from $80 to $93.
By the time this advice was being released, nobody could have purchased Nike for $79.75 anymore. In fact, the next official trade after Janney’s upgrade printed at $87.98. That didn’t stop the analysts from recommending “a rotation into shares of Nike” at the no-longer-available $79.75 price to try to capture the move to their new $93 target.
Barron’s certainly knew all these facts before publishing its “Hot Research” blurb the following Monday morning at 5:17 a.m.
The reputational aspects of this kind of misrepresentation are obvious. Big money can be involved as well. Performance figures for model portfolios are typically based on prices in effect at the time ratings are changed.
Past-posting can improve claimed results dramatically while being completely useless to clients who must deal with real-time bid-ask spreads.
Janney Capital implies that they made this call with NKE still at $79.75. Would it really have been worth telling customers to buy Nike at almost $88 for a potential move to $93?
Guru Focus published my article about a similar sleazy move, by Wedbush Securities, regarding the shares of Bed, Bath & Beyond (BBBY, Financial). My previous piece was dated June 29, 2014, and discussed what happened after BBBY gapped down dramatically after hours that week.
http://www.gurufocus.com/forum/read.php?2,266064,266064
Janney Capital should not try to deceive people with their reports. Barron’s was wrong to aid them in the attempt.
Disclosure: Long BBBY shares, short BBBY options
