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Old 04-20-08, 09:30 PM
Dee Dee is offline
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negative profitability

why do analyst sometimes rate a stock with negative profitability a buy?what are they putting in consideration when doing that?
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Old 04-21-08, 02:40 PM
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Theoricaly that they hope the company will return to profitablily.
In practice, they know that the company will lose even more money soon and those who pay them want to liquidate their stock holding ASAP.
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Old 04-21-08, 09:03 PM
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Yes. Any company exists to make profit. Even if they make a loss now, they would want to turn profit sometime in the future. The analyst probably is looking into that possibility when putting the buy recommendation.
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Old 05-22-08, 03:00 AM
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they are just giving there views there is no gurantee that stock will come back to profit so always take risk considering all factors
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