Is S&P INTENTIONALLY HOSING investors??????
First, let me start out by saying that this is the same analyst that hosed S&P readers on SPF as it now trades at $1.00. I have to tell you, prior to me starting to analyze SPF, I never really read an S&P report.....after analyzing SPF in detail for a couple years, it became clear to me that no analyst could put out crap like this and maintain the interest of investors at the same time.
Case Study MHK:
On February 23rd, S&P's analyst K.Leon came out with this report on Mohawk:
02:32 pm ET ... S&P UPGRADES OPINION ON SHARES OF MOHAWK INDUSTRIES
TO SELL FROM STRONG SELL (MHK 27.86**): MHK is a market leader in carpet,
tiling and wood flooring, but consumer spending remains weak due to a
deepening housing recession. Assuming a weak market outlook for the global
flooring industry and applying a forward P/E of 11.1X to our 2009 EPS estimate of
$2.25, which is near the middle of MHK's historical range but still above peers, we
are lowering our 12-month target price to $25 from $27. MHK's share price has
declined nearly 40% since its $45 high last month, but the shares are still
overvalued, by our analysis. /K. Leon-CPA
OK, fine Mr. Leon, you expect MHK to earn about $2.25 per share this upcoming year and in order to lower your price target by only $2 you are applying a 11.1X multiple to your ridiculously high estimate to justify a price target of $25 and UPGRADE MHK from Strong Sell to just Sell.
Whooops!!!!! THE NEXT DAY, that is right, THE NEXT DAY MHK releases guidance for Q1 2009 and it is more in line with Alstry's projections and not even close to Mr. Leons. But that is not the amazing part of the story. Just look at the comments Mr. Leon puts out THE NEXT DAY......LESS THAN 24 HOURS LATER AFTER BEING SOOOO WRONG!!!!!!!!!!
February 24, 2009
12:10 pm ET ... S&P UPGRADES OPINION ON SHARES OF MOHAWK INDUSTRIES
TO HOLD FROM SELL (MHK 24.03***): MHK posts Q4 loss of $0.23 vs. $5.53 EPS,
excluding asset impairment charges, compared to our breakeven forecast. Sales
declined 18% in Q4 as all three business segments showed weaker sales in all
regions.We see a 23% sales decline in '09 and then a 10% rise in 2010. With
market weakness expected ahead and excess inventories well above needed
levels, we are lowering our '09 EPS estimate to $0.25 from $2.25, but raise '10's to
$2.50 from $2.40. Applying 10X our forward 2010 EPS estimate, we are maintaining
our 12-month target price at $25. /K. Leon-CPA
ARE YOU F*^KING KIDDING ME????????????
HE LOWERS HIS 2009 EARNINGS ESTIMATE(the basis for his $25 price target less than 24 hours earlier) from $2.25 to $0.25 and he UPGRADES MHK to HOLD from SELL??????????? And how the hell does he justify this???? By completely throwing out the basis from his price target just 24 hours earlier (if consistent and true to his logic, applying a 11.1X multiple to his new 2009 earnings estimate would yield about a $3 dollar price target and somewhat directionally consistent with Moody's downgrade Senior Debt rating to junk) do you think he just increase his PE multiple???
This sly dog jumps to 2010 becusue he just bent over investors with his 2009 earnings projection and has to figure out somehow to justify the $25 price target he just put out LESS THAN 24 HOURS EARLIER!!!!!!!!! And not only that, he INCREASES 2010 projections in order to attain his $25 number.
Fellow Fools, these are just the facts, take them as you wish.......I COULDN'T MAKE THIS UP IF I TRIED AND HAD 10 STRONG BLOODY'S IN ME.......if you really want to laugh, this is the exact same commentary I did with this same analyst on SPF as it skyrocketed all the way from over $30 to now $1 AFTER a $600 million cash injection.
NOW YOU KNOW WHY I CREATED ALSTRY AND ALSTRYNOMICS......SOMEONE HAS TO DO SOMETHING!!!!
EVIL TRIUMPHS WHEN THE GOOD DO NOTHING!!!!!!
I appolgize for the intensity, this just brought back some vivid memories and yes my Foolish friends, in case you had a shred of doubt, I am very short this company.
HOW NOBODY IN THE MAINSTREAM PRESS PICKS UP ON A STORY LIKE THIS SIMPLY ESCAPES ME!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!