Analyst's ratings (or over-ratings) post earnings miss

[rayjman]

OK....i'm new to investing admittedly, but stocks overall seem like deals when they get the shotgun by some investor (no comment but usually they have no idea what they are talking about <--oops I did comment).
I'm not talking micro caps here (never really had interest)...

I've been watching my trade screen for a while and keeping in the theme of "buying on weakness". Albeit you may only get a 2% return or so, with the market conditions being what they have as of late, if you buy "best of breed" you still would have been long on a really good company.
Here are my misses where I did not pull the trigger:
VMW post earnings & the slam down (I lost of course):
post earnings:
54 someting
today: 59.4 after hours (according to Finance Yahoo)

MCD @ 49.50
ok , admittedely Yahoo charts don't show it, but "best of breed" this again on weakness

My latest trade was ACTU and here are my results:
Stocks80ACTU ACTUATE CORP02/04/0802/06/08$370.55$389.45$18.90 Short

$18.90 per above

Not a big gain, but, back to CMG (a.k.a MCD of course). Seeing it fall in after hours to $93 and back up to $105 was very painful today when I didn't pull the trigger @ $93 in after hours.

In short, I believe these stocks are getting beat up irregularly (recession or not) and WAY undervalued (BBY included which I'm currently long).
If I had more capital I will definitely be sure to pick some up, but for those who know me, I only buy it if earnings surprises are met or OVER quarter to quarter.
Lesson learned for me?
BUY a best of breed stock, IGNORE what everyone is saying about recession (but most importantly the price decline or some analyst [no I will not capatalize it]) and pull the trigger on a pullback.
I guess in my short Best of Breed stocks will only go in one direction...up, up, up!
Ray

p.s. I think CMG missed earnings by 2 cents...but also watch out for profit as well (one other note, growth opportunity of course).

[rayjman]

duh, I stated one quarter miss on above
guess i should have retitled the subject "One quarter miss, best of breeds"
My point being, that you should be expected to miss expectations by 2 cents and guide lower.

Unfortunately I dont think that is how the "Street" thinks, but irregardless there are a LOT of good deals floating out there IMHO (In My Humble Opinion)
Regards,
Ray

[rayjman]

sorry, forgot one more not after proof reading, these were what the street refers to as "falling knives". Even so, post one quarter on disappointing earnings, it seems like a lot of capital investment or indivudal trader investment movement comes in. I can't explain it, but it only seems to work......grrrr
sorry, one more ticker I've been tracking: NSR (look at the recent chart it should be pretty self explanatory)
Ray

[rayjman]

sry for the extranneous comment (or not or I wouldn't post it!!!)
some of the weakness obviously may also be on market weakness of course
If I see the DOW tank down -200 AND a quarter miss......pull the trigger on a best of breed stock that you KNOW will go up.
Then....send me a XMAS present next year with the earnings ;-)
Happy investing
Ray

[Fredledingue]

What do you call "best of breed" actualy? I'm asking about VMW and NDC as examples given by you.

[rayjman]

Good point, actually I'm staying away from technology at this point as I see the sector as a whole going down. I believe they stated VMW had most of the market share, but this may change rapidly.
I guess what I consider Best of Breed in simple terms would be looking for stocks where they have the majority of the market and are growing companies (i.e. increasing same store sales or customer base) quarter over quarter. In addition a product that is always bought (such as MCD & cheeseburgers).
Of course VMW might be a skeptical one too list, but I tend to delve into high risk sometimes as well for a short period.

[rayjman]

another ticker symbol i forgot of course was Mastercard.
Not here to advocate it, but I picked it up at the $200 level and doing very well.
Once the VISA IPO comes out, it may peak my interest, but considering MA's IPO, it was disappointing for short term returns.
I guess this is what I'm looking for on "Best of Breed".....almost everyone owns a VISA or Mastercard or AXP card, but AXP I'd probably have to short right now if the consumer spending index as well as consumer short term debt keeps up as it is currently as American Express is something you need to pay off of right away.
Hope this helps, Ray