4. Ramey's Ridiculous Reversal
Note to competitive Twister players. Steer clear of D.A. Davidson analyst Tim Ramey.
Forget spineless, the guy has no skeletal system at all!
In a stunningly quick about face, Ramey said he was upgrading Herbalife (HLF - Get Report) from neutral to buy last Friday and "reestablishing" his price target on the embattled supplement seller to $78 from $38. The head-turning move came a mere three days following the longtime Herbalife bull's decision to downgrade the stock over concerns about the company's exposure to the KPMG insider trading scandal."Earlier this week we downgraded shares of Herbalife to Neutral from Buy, concerned that the withdrawal of KPMG's audit opinions for the past three years could have material negative impacts on the shares. After our action, the company made assurances that they did not see the risk of a delisting notice from the NYSE, nor do they believe they are, or expect they may be, in violation of their loan covenants," wrote Ramey, adding that he was "relieved to have these assurances" from Herbalife. "Relieved"? Why is that Timmy-boy? We know we've asked you this before, but are you distributing Herbalife on the side? Otherwise, there is no plausible reason save insanity for a Wall Street analyst to be this unabashedly upbeat about such a controversial company unless investment banking fees were at stake . . . and even by those standards you've gone overboard! "Chalk it up to the heat of battle. These are unique circumstances," wrote Ramey about his embarrassing to-ing and fro-ing. Get a grip Tim. That "battle" talk is so ridiculous. This silly fight over a highly questionable stock is between a pair of hubristic hedge fund billionaires named Icahn and Ackman. Normandy it's not. As for the stock, Herbalife closed slightly above $38 last Thursday night prior to Ramey's reversal. It finished down almost 4.5% Monday at $35.75. In other words, Ramey could have saved his shareholders a fair bit of money -- and us a whole of whiplash -- if he could have only held out a full business week before changing his tune. Again.
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