A true conversation (or at least the gist of it):
"The Company has done a good job of overcoming past difficulties, and it has a lot of potential going forward," said The Analyst.
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The stock is riding pretty high today on some buzzwords. How justified is this recent movement?
"The Company has some products in that area."
What are the chances those products will be big revenue generators?
"Well, I don't want to get too specific about things. I don't want to make any future predictions."
Isn't that what you do for a living?
"Hey, I get paid to serve large clients, but people don't get it. The people who will be reading your column are retail investors, and that's not who I work for. I'm talking to you now because it's good for business if an analyst can get his name out there, but I don't want to go into hazardous territory either."
Ok. Let me ask you this, what's your rating and price target on the stock?
"I have a "buy" rating. I'll tell you what my price target is, but it's not for publication."
Um ... why not?
"Because if you print that price target, someone is going to call me and bother me about it. I don't need some guy calling me up a few months from now bugging me about why the stock didn't hit that."
Price targets are pretty common knowledge nowadays anyway, aren't they? Anyone with an online brokerage account can call up the latest research, First Call notes, that kind of thing.
"Yeah, but I don't need to highlight my target."
Then why have a price target at all?
"You have to include them in your reports. But it's not like it's some kind of hard prediction written in stone, but individual investors can't seem to understand that, and then they get upset."
Do people go off on you?
"Oh yeah, you wouldn't believe the kind of crap I get. People are always calling and asking for stuff, and if on some rare occasion I take pity on the guy and e-mail him a copy of the report, he'll call me back and scream into the telephone at me when it turns out to be wrong, and I don't need that kind of bulls**t, you know?"
Well, people send me angry e-mails if I write something they don't like.
"Do they really?"
Yeah, but that's life as a journalist. You get used to it.
Morgan Stanley Dean Witter analyst Mark Edelstone upgraded STMicroelectronics to a "strong buy" from an "outperform" rating, while keeping his price target at $100. After disappointing times in 1997 and last year, the company is benefiting from the overall recovery of the chip industry, although it hasn't quite regained its level of earnings from a couple of years ago.
Vitria also got a boost from the overall market. Major indices were shooting higher in the afternoon, with the Nasdaq Composite Index up 53.73 to 2860.45 going into the final two hours of this week's regular trading. The S&P 500 had risen 17.52 to 1336.00, and the Dow Jones Industrial Average had gained 109.23 to 10846.69. 22GO>