Ask Our Pros is a service we provide to
subscribers that enables them to get answers to their investment questions from our contributors. To ask a question, you must be a
subscriber. Please click here for information about a free trial.
I have never trusted analyst ratings. I only use analysts' reasoning as a starting point for homework. But one thing that has always puzzled me is that occasionally, some analyst will initiate coverage with a sell. What's this? Why bother? Are these guys short the stock or trying to make an impact on a related stock, or is it just another brilliant analyst technique?
In my opinion, investors of all shapes and sizes should take all analyst ratings with a grain of salt.
Reading a couple of reports on a company you've never really looked into is a quick way to get some good insight into the current state of a company's business -- and help you come to your own decision. That's because oftentimes, even with the same set of facts, three analysts will come to three different investment conclusions about a given stock.
David Peltier is a research associate at TheStreet.com In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier appreciates your feedback;
to send him an email.
Interested in more writings from David Peltier? Check out his newsletter, TheStreet.com Dividend Stock Advisor. For more information,