Despite all of Wall Street's conflict and contention, a fortunate few companies enjoy unanimous support among professional analysts. If the market's movers and shakers all believe these companies will beat the long-term averages, well, surely they will -- right?
Not so fast! With help from the 180,000 members of Motley Fool CAPS, we'll see whether these high-flying favorites deserve analysts' unwavering support.
CAPS Rating (out of 5)
CAPS Bullish Sentiment
No. Wall Street Analysts
52-Week Price Change
|Google (Nasdaq: GOOG )||****||86%||47||9%|
|Neoprobe (AMEX: NEOP )||*||71%||3||31%|
|SPDR Gold Trust (NYSE: GLD )||**||86%||7||53%|
Source: Motley Fool CAPS.
Searching for a signal
Unlike the situation over downgrading the U.S.'s debt rating, in which Standard & Poor's just fired its CEO, apparently no one's head will roll because of the quick about-face it made on Google's rating, downgrading it last week to "sell" only to upgrade it to "hold" just three days later (disregard the conundrum of how you're supposed to hold a stock you've already sold).
In regard to Google, the abrupt change of course was due to Google's stock plummeting in the wake of its intended purchase of Motorola Mobility (NYSE: MMI ) . The $12.5 billion deal creates new uncertainty for the company as it becomes a hardware manufacturer for cell phones, possibly putting it in conflict with rivals who license its Android operating system. The stock traded below S&P's $500 target price, so the ratings change makes sense.
Android makes up 52% of the smartphone market, according to NPD Group, with Apple's (Nasdaq: AAPL ) iOS a distant second at 29%. Research In Motion (Nasdaq: RIMM ) is further back in third at 11%, with Windows Phone 7, Windows Mobile, and WebOS all commanding just 5% each. Hewlett-Packard just announced it was abandoning the WebOS platform.
CAPS member asamples3400 is unconcerned about Google stepping on the toes of other smartphone manufacturers, seeing the combination of the dominant OS with a handset maker as a potent force that overcomes those niceties.
Who cares about Google alienating HTC and other android phone manufactures. Android powered phones are so quickly taking over IOS phones that it will soon be the windows of the mobile phone market.
Let us know in the comments section below or on the Google CAPS page whether you agree that this purchase was the right one to make.
Go big. Go all-in. However you want to describe it, Neoprobe is putting all its eggs in the drug development basket, which now primarily rests with its Lymphoseek marker, which determines the spread of certain solid-tumor cancers into the lymphatic system. It sold its handheld gamma detection system business last week to privately held Devicor for $50 million, but that business was primarily responsible for the revenue Neoprobe generated.
Thus, Neoprobe has a lot riding on FDA approval of Lymphoseek. It's also developing RIGScan, a biologic intended to help in the detection of colorectal cancer tumors. The technology has been left dormant since the late 1990's after Neoprobe failed to get FDA approval.
Neither Lymphoseek nor RIGScan is expected to provide any revenues for the immediate future, so the decision to jettison the GDS business carries some risk. CAPS All-Stars seem to think the risk is too great, as four out of five of those rating the biomedical company think it will underperform the market, but the broader CAPS community is less pessimistic, with 71% rating it to beat the Street.
Add Neoprobe to your watchlist to keep tabs on whether it will get the results it needs to seek out revenues, let alone profits.
We're in the money
Can the country afford the Fed implementing a QE3 program? Last month, speculation soared that Chairman Ben Bernanke would start up the printing presses again as prolonged sluggishness of the U.S. economy might warrant additional stimulus, and the Federal Reserve was ready to step in. It hasn't happened yet, but Bernanke's address to the world's bankers this Friday might be when he unveils his plan. He used the forum last year for unveiling his failed QE2 program.
If Bernanke continues to devalue the dollar through his quantitative easing programs, gold is going to look even more attractive than it does now. It broke through $1,900 an ounce yesterday before pulling back somewhat. The SPDR Gold Trust fairly mimics the actions of gold, and shares are up 33% so far this year.
Analysts at JPMorgan Chase (NYSE: JPM ) see gold prices hitting $2,500 an ounce by year end while UBS sees it at $2,100. Goldman Sachs pegs it somewhat lower at $1,725 per ounce, but that's still higher than its previous forecasts.
Gold prices have skyrocketed lately, creating a bubble. But eventually, even if the economy doesn't improve much, that bubble will burst and prices will level out. Maybe this won't happen soon, but I still have faith in the world economy.
Agree to disagree
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Sign up today for the completely free service, and tell us whether these stocks deserve to have Wall Street marching lockstep.