Investors will recall back in January when the research firm Bear Stearns
Those familiar with the story will remember the collapse of Synaptics stock after the same analyst changed his opinion in February. In a note to clients, the analyst speculated that Apple Computer
Now the Bear Stearns' analyst has changed his opinion yet again. Earlier this week, he said that while Apple has developed its own interface solution for the iPod using CypressSemiconductor's
In fact, Synaptics confirmed in a recent 8-K filing that its interface was being used in Apple's new series of iPods. In his most recent commentary, the Bear Stearns analyst noted Synaptics' introduction of its MobileTouch technology for use in mobile phones. Correctly, he pointed out that this is a new and expanding market for the tech company.
Why Bear Stearns would make seemingly unsubstantiated claims is unclear, especially in light of the negative impact such statements would have on the company's share price. Taking a look back over the past few months, it became clear to me that brokerage firms in general have a habit of being more changeable than the weather.
For example, last November Bear Stearns issued a downgrade for Synaptics to "peer perform." In early January 2005, the firm upgraded the stock to "outperform." Only a month later another downgrade was issued along with a price cut, which prompted a 40% sell-off in the stock. Now, a little more than 30 days later, the very same analyst does a reversal by upgrading the stock, and issuing a higher price target. Can they not make up their minds?
This whole painful event should be a lesson to investors. Take what Wall Street says with a high degree of skepticism. The pros more often than not miss the mark. Fools know to think for themselves and not to rely on advice from brokers for investment decisions. Synaptics' fundamentals remain intact. As I said, I see good value in this stock and, as a result of these shenanigans, the stock price is more attractive now than before. So thank you, Bear Stearns, for getting it wrong.
For more Foolish insight check out Synaptics' Ups and Downs.
Fool contributor Kelvin Taylor does not own shares of any of the companies mentioned.