Friday, June 18, 2010

"Wall Street Finest : It´s Always A Good Time To Buy, Buy, Buy....." BP Edition.....

Even as i have to admit that the "BP SPILL DRAMA" is a very complicated to judge it is nevertheless a perfect fit to my earlier post Wall Street Finest.... Of Course It´s A Good Time To Buy, Buy, Buy..... and a nice confirmation for what i´ve said in the past ....
"There maybe are legitimate reasons to buy stocks, but a favourable opinion from "Wall Street Finest" should definitely not play any role in your screening process .... Except you use them as a "contrary indicator".... ;-) "
Selbst wenn ich zugeben muß das der BP GAU schwer einzuschätzen ist, passt es wie die Faust aufs Auge zu Wall Street Finest.... Of Course It´s A Good Time To Buy, Buy, Buy..... und ist nebenbei die Bestätigung zu dem was ich bereits seit langem zum Thema "Experten" zu sagen habe....
"Grundsätzlich mag es ja durchaus gute Gründe die für Aktien sprechen geben, man sollte aber sicherstellen das die Einschätzungen der "Experten" beim Auswahlprozess keinerlei Rolle spielen....Es sei denn man nutzt sie als Kontraindikator.... ;-)"

Special Report: Amid the Gulf crisis, Wall St touted BP stock Reuters

As early word of BP's Deepwater Horizon blowout began spreading, investors panicked. After closing above $60 before the April 20 disaster, the energy giant's shares plunged almost 20 percent in New York, to below $50, in just two weeks.

It is not hard to understand why. Even then, the out-of-control oil spill in the midst of rich fishing grounds and nearby resort beaches raised the specter of horrific damages and untold potential liabilities.

Yet, nearly to a person, the dozens of securities analysts who followed the British oil giant were unfazed. As BP shares continued to drop, most were screaming the same message: buy, baby, buy.

Credit Suisse, which had a "buy" rating on the stock at the time, did not even mention the accident in an April 28 report. The firm upgraded earnings estimates after BP reported strong quarterly results the day before.

A day later, with BP's shares then down 11 percent, Citigroup's Mark Fletcher weighed in. He argued that the decline was "disproportionate to the likely costs to the company, even assuming damages can be claimed." In the same report, he estimated BP's total share of the cleanup at just $450 million -- today, conservative guesses put the figure at $10 billion to $20 billion.

Around that time, Morgan Stanley was among the chorus citing the strong rebound of Exxon (XOM.N) shares after the 1989 Valdez tanker spill in Prince William Sound, Alaska, as a reason to be bullish. "We think the sell-off presents an attractive buying opportunity for investors with medium-term investment horizons," the firm wrote.

All told, 27 of 34 analysts tracked by Thomson Reuters rated the stock "buy" or "outperform" as recently as May 11. The other seven rated the shares "hold." There was not a single rating of "sell" or "underperform" among those tracked.

And then there was the exuberant television host Jim Cramer, who insisted that Bear Stearns was fine just days before the company's stock crashed. On May 10, he told viewers of his "Mad Money" (Cramer: "The Dividend Is Safe, Way Overdone On The Downside" / Stock just under $ 50 & Cramer:Gulf Spill Won’t Break BP / Stock above $ 50 ) show on CNBC that he was purchasing shares of BP for his charitable trust at just under $50. "If you get any good news at all, you're at the bottom," he said. "I'd like to buy it.

BP has at least managed to outperform his May 10th "Housing Shortage Top Pick" SPF... I doubt that he is still refering to his Housing Shortgage Play Version 1.0 July 2008 and has meanwhile switched to version 2.0 or 3.0....To be continued.....UPDATE: Watch his comments after the entire group has tumbled close to 30% & his top pick SPF worst.... To call him a revisionist is an understatement.... Couldn´t resist.....

Immerhin hat BP es geschafft besser als sein anderer Favorit SPF abzuschneiden....Nach seinen letzten Kommentaren im Angesicht einen 30% Crashes im Homebuildingsektor sowie einer Halbierung seines Favoriten SPF muß man schon sagen das der CHUZPAH mehr als treffend ist....


If he did, he didn't make out so well. As estimates of the spill grew -- and grew and grew -- and efforts to cap it failed, BP's stock sunk ever lower. It didn't hit bottom for another month, the New York-traded ADRs touching $29 in midday trading on June 9, down 52 percent from just before the Deepwater Horizon disaster. That's approaching $100 billion in shareholder wealth that has been destroyed.

GROUP THINK

Others say the failure of even one analyst at a major firm to grasp the potential risks and advise clients to dump the stock reflects the profession's overall group-think tendencies. "For sell-side analysts, the incentive is to remain toward the center of the pack. If they are going to be wrong, they have got to be in good company," said Michael MacPhee, at investment manager Baillie Gifford.

As the shares headed toward almost half their pre-disaster level, most analysts issued more cautious notes, with Goldman, Natixis, S&P equity research and Charles Stanley, cutting their ratings to neutral or hold from buy.

By June 16, BP was rated a buy by 16 analysts, outperform by eight, a hold by another 8 with only one sell, according to data on Reuters Knowledge. That was the date, of course, when BP agreed to fund a $20 billion escrow account and suspend its dividends for the year.

With the price around half what it was before the spill, analysts might have a stronger argument that BP was a buy in mid-June, though that will be of little comfort to anybody who followed the advice to buy a month ago.

H/T Reformed Broker

Bloomberg

The split over BP between U.K. and U.S. investors extends to analysts. The U.K. stock has 26 “buy” recommendations, while 12 analysts recommend holding the stock and two say to sell. In contrast, almost as many U.S. analysts advise against purchasing the stock as buying it. The ADRs have seven “buy” recommendations, five “holds” and one “sell.”

And when a guy like Chanos is shorting Exxon widely viewed as the goldstandart in the industry you have to wonder even more....

Wenn ein Typ wie Chanos momentan aber selbst den am meist angesehenen Titel im Sektor Exxon shortet ist das zumindest mehr als eine Randnotitz wert.....

Watch the percentage of sell ratings for S&P 500 companies flatlining even in the deepest recession since 1930........

Man beachte die rote Linie der Verkaufsempfehlungen für die 500 Unternehmen im S&P die selbst während der tiefsten Rezession seit 1930 "stabil" geblieben ist......

BP Oil Spill: Brief History of The Incredible Rising Cost Estimate WSJ Marketbeat

BofA Merrill, April 28 — “To put it in context, the Valdez clean-up cost reportedly reached [around] U.S. $3 billion and we expect the cost to BP to be lower at this point.”

BofA Merrill, April 30 — “If we assume the clean-up takes 6 months and include relief wells costs, total costs would be in the U.S. $2 billion range (U.S. $100 million per well + 180 days at $10 million/day). Even assuming additional civil damages similar to Exxon Valdez of US$2.5 [billion] awarded against [Exxon Mobil] in 2009, BP’s net costs for Macondo would approach [$3 billion] – just over half [first quarter 2010] earnings. While the market may not be willing to assume such a scenario, given ongoing uncertainty, it, nevertheless, underscores that the hit on BP’s shares looks overdone.”

BofA Merrill, May 28 — “The US Geological Survey (USGS) has independently estimated that the flow rate at Macondo is in the 12-19kb/d range. Whilst this is clearly larger than the previous [5,000 barrels a day range] estimate, it is inline with the flowrates of typical wells in the area as we had indicated (see BP: Making tangible progress 21-May). We note that this new information makes no difference to our worst case liability estimate of U.S. $10 [billion] – based on the recently proposed liability limit.”

BofA Merrill, June 10 — “Given the uncertainties presented by the spill (our base case cost est. is $28 [billion] but the worst case scenario cannot be adequately quantified.”

To be continued.....Check out the link for more stunning quotes.... Let´s all hope we won´t see an updated "Hurricane Edition".....

Fortsetzung folgt.......Mehr von den "Experten" gibt es hier.... Daumen drücken das wir um eine ähnliche Auflistung im Zusammenhang mit der "Hurricane Saison" herumkommen.....

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6 Comments:

Blogger jmf said...

BRUNO GANZ ROCKS!

Hitler finds out about the BP Oil Spill Barry Ritholtz

8:37 AM  
Blogger jmf said...

As a reminder.... The first BP estimate was 1.000 barrels.....

Internal BP Document Confirms Matt Simmons' Worst Case Prediction Of Spill Rate Of 100,000+ Barrels Per Day ZH

5:02 AM  
Blogger jmf said...

With his track record definitley way more credible than every other buy call from Wall Street Finest....

Whitney Tilson's Bull Case On BP ZH

We recently established (and disclosed publicly on CBNC; see here and here) a modest (4-5% of our funds) position in BP, and the blowback has been unlike anything we’ve encountered in our careers – and being value investors, we’ve owned a lot of unpopular stocks over the years! This blowback, combined with hysterical headlines, rumors and speculation, have not shaken our confidence, but rather reinforced it, as we love buying when other investors are panicking.

5:09 AM  
Blogger jmf said...

S&P 500 Sector Buy and Sell Ratings Bespoke

9:13 PM  
Blogger Sylvain said...

Hallo Jan!
Sylvain Asimus hier. Du warst frueher auf meiner mailing list als ich Technische Analyse gemacht habe bei Natixis.
Ich kann deine email nicht mehr finden (auch nicht auf deinem blog). Kannst du mir deine addresse noch mal schicken?
Vielen Dank,
Sylvain

4:34 AM  
Blogger jmf said...

Moin Sylvain,

nett von Dir zu hören...

immobilienblasen at googlemail.com

9:54 PM  

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