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OklaBoston (59.32)

JNY, another "cover your shorts" stock.



January 24, 2010 – Comments (3)

A case of insomnia resulted in me getting on the internet tonight to pass the time, and by basically random chance I chose to investigate Jones Apparel Group on some sites I'm familiar with.

I came to the conclusion that this stock is one Fools should basically ignore for the time being. On the one hand, the cash flow numbers and debt/equity numbers are not even remotely attractive. But according to, the company's earnings have beaten analysts forecasts for 5 consecutive quarters. FIVE! Is that scary to anyone thinking about shorting it or not? 


3 Comments – Post Your Own

#1) On January 25, 2010 at 12:08 AM, UltraContrarian (30.61) wrote:

This kind of thing tells you more about the analysts than the company.  They are either dumb or acting dumb to try to please management.  Analyst's positive bias is part of the reason corrections are generally more violent than rallies.

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#2) On January 25, 2010 at 1:03 AM, OklaBoston (59.32) wrote:

If earnings beat concensus forecasts only 2 or 3 times in 5 quarters that probably is what statisticians all random chance. Which is essentially what non-mathematicians call dumb luck or coincidence. 4 times in 5 quarters could, again, be random chance but could also be a pattern worth paying attention to. 5 straight quarters is statistically highly improbable. Conceivably it could be the result of the guidance management gives analysts being deliberately on the conservative side.

Wouldn't it be smart on management's part to try to keep analyst's estimates lower than their own, better informed, expectations? I think it would be. 


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#3) On January 25, 2010 at 1:10 AM, goalie37 (89.96) wrote:

Thank you for blogging about a stock.  This weekend it seemed CAPS blogs were getting hijacked by political agendas.  I gave you a rec for this.

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