While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of tissue products company Wausau Paper (NYSE: WPP ) plunged 6% this morning after it posted disappointing third-quarter results and received a downgrade -- from buy to hold -- from Deutsche Bank.
So what: Along with the downgrade, analyst Mark Wilde planted a price target of $14 on the stock, representing about 3% worth of upside to yesterday's close. While momentum traders might be attracted to Wausau's steady climb in 2013, Wilde thinks that the appreciation prospects are limited given the company's downbeat guidance for the rest of the year and 2014.
Now what: According to Deutsche Bank, Wausau's risk/reward trade-off is rather unappealing at this point. "[T]he real 'news' is that FY13Q4 & FY14 EBITDA targets fell short of our existing est's & WPP's prior guidance," noted Deutsche. "Finally, commentary notes 'modified sequencing' of its new premium products into the mkt and Q3 #'s suggest that 7.4% vol growth was driven as much by lower margin 'support' products as the firm's new premium offerings." When you couple those troublesome trends with the stock's 30-plus forward P/E, it's tough to argue with Deutsche's downgrade.
More reliable ways to build wealth
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.