Four Noteworthy Analyst Calls on Friday
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Stocks can be pushed higher or lower as analysts provide their outlooks. These calls are not enough to make an investment, but should be considered as part of your research. Therefore, I am assessing a few of Friday’s top calls, and determining if each was a good call.
Synaptics (NASDAQ: SYNA)
Synaptics traded higher by 2.92% on Friday while the rest of the market traded lower. The stock is now approaching its 52-week high, and Pac Crest seems to believe that the company will benefit from rising demand for tablets and expensive touchpads.
From a valuation point of view, the stock isn’t expensive. However it has been volatile. If sales are seeing a boost then it’s likely that Synaptics will trade considerably higher. Therefore, I’d watch the stock but wouldn’t call it a “Buy” just yet.
Celgene (NASDAQ: CELG)
Celgene traded against the market with gains of half a percent following an upgrade by Deutsche Bank. The firm’s call was in part due to the company’s growth, but specifically because of its belief that Apremilast is a blockbuster. The firm states that its checks among dermatologists indicate success for the product.
This is a product that has been somewhat controversial, with sales expectations as high as $1.5 billion and as low as $300 million. Obviously, Deutsche Bank is taking the higher end, and if this is a result of demand checks then this was in fact a great call and could be an indication of large future gains.
Teradata (NYSE: TDC)
Earlier last week shares of Teradata fell significantly lower after Morgan Stanley removed the stock from its list of “Best Ideas.” However, on Friday, the stock gained almost 3% after Stifel upgraded the stock to “Buy.” The firm’s call was fair and was bullish based on the company’s valuation.
However, the firm did state its belief that Q1 results could miss expectations due to macro conditions but that demand in the second half would rise. As a result, the call is a result of the company’s valuation, and with the stock sitting near 52-week lows, this could very well be a great call.
Facebook (NASDAQ: FB)
Shares of Facebook rose 1.18% on Friday following a bullish call from Argus. The firm rates the stock a “Buy” and is particularly optimistic about its software-driven strategy. The firm believes that the company’s new app/phone will be appealing to many of the company’s one billion-plus members, and that it could continue to grow due to it not being locked into just one device.
Personally, I agree. I am not sure of how successful its new app/phone will be in the market, but I do believe that it will be appealing to many and that the company’s willingness to roll out new services will produce rapid growth.
In my book, Taking Charge With Value Investing (McGraw-Hill, 2013) I discuss how to assess the opinions of analysts, and how to use them to your advantage. Typically, there are two types of calls, those that follow the trend and those who call regardless of the trend. It is important to distinguish between these two groups, and to not follow the performance that a call creates, but rather read and incorporate the notes as part of your research. Then, when you are able to find inconsistencies between value and valuation you will be better prepared to capitalize on the opportunity.
Brian Nichols has no position in any stocks mentioned. The Motley Fool recommends Facebook and Teradata. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!