In a week when Netflix
For Ilan's thinking, along with two additional buy recommendations, read the summaries below.
Rising Star Shorts: Bank of America and Lender Processing Services
Ilan believes there will be considerable fallout from the "mortgage fraud scandals ripping through Wall Street" and decided to bet against two companies that might possibly suffer from future lawsuits and regulation.
He points out that Bank of America is facing a wide variety of fraud allegations. While his colleague Anand feels that the company is oversold, Ilan argues that state authorities are determined to "get to the bottom of potential fraud and abuses." Ultimately, as Ilan sees it, investigations across all 50 states will not bode well for Bank of America.
Ilan's case for shorting Lender Processing Services
Rising Star Buy: Houston Wire and Cable
Rising Star analyst Jason Moser provides us an insight worthy of Confucius when he writes, "in a world that grows more wireless by the second, it's ironic but true: We still need wires." Yes, yes we do!
That's why Jason bought shares of Houston Wire and Cable
Rising Star Buy: Dean Foods
While Jason argues that the world still needs wires, fellow Rising Star analyst Jim Mueller makes the case that people will always want dairy products, and will consume more of them as the economy continues to improve. That's why he's recommending Dean Foods
Jim believes that the company's cost-cutting strategy combined with an increase in consumer demand will lead to better results for the company. With analysts expecting little of Dean Foods, Jim likes the odds here. To hear more of his thinking, pour yourself a cup of eggnog and read his entire article.
Watch your BAC
So who's right about Bank of America? Is it a woefully oversold titan that will rise considerably as America gets its financial house in order? Or is it a deeply flawed institution with potentially more legal issues than Julian Assange?
Personally, I'm bearish on Bank of America, but I'm not sure I'd short the stock. The nice thing about investing, as Warren Buffett always points out, is that you don't have to swing at every pitch.
Let us know what you think in the comments box below. And be sure to read all of our Rising Star stories that are summarized above.
John Reeves does not own shares in any of the companies mentioned in this article. Netflix is a Motley Fool Stock Advisor pick. The Fool owns shares of Bank of America, Houston Wire & Cable, and Dean Foods, and has short positions in Bank of America and Lender Processing Services. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.