How many of us still believe in Analysts report?
This is taken from TodayOnline today, page B1 dated 30 July 2008:
Westcomb downgraded Lian Beng and cuts the price target from 83 cents to 25.5 cents. A wobbling cut of 57.5 cents or 69%.
Daiwa downgraded CDL Hospitality Trusts and cuts the price target from $2.07 to $1.24. A wobbling cut of 83 cents or 40%.
UBS cut YangZiJiang price target from $2.66 to $1.30. A wobbling cut of $1.36 or 51%.
The market has corrected substantially from their peak since end 2007. The companies’ valuation changed according to the market condition. However, they should have sufficient time to update the report or for the least they can do, suspend the rating depend newer development. The abrupt cut of target price above 40% is indeed a rude shock to investors who still holding on to the last research report. Worst still, holding on to the losing stocks because of an overly optimistic but outdated reports!
Even though every company will attach a long disclaimer to discharge their liability, they shall at least bear some moral responsibility to ensure that the content of the report is simply updated regularly.
Will you still believe the target price set by Analysts?
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