The 5 Dumbest Things on Wall Street This Week: Jan. 11
In his note titled "No visibility, but can't get much cheaper," Lazard Capital Markets analyst Sean Lavin opined: "While we and it seems management have limited visibility on future orders and revenue, we remain at 'buy' given the shares were trading at just 0.88x in afterhours vs. our 12-24 month revenue estimate. That said, we believe the upside outweighs the downside. We see an investment in Accuray as one with significant potential upside, but also a lot of risk."
Um, sorry Sean, but if the stock "can't get much cheaper," then how is there "also a lot of risk"? It seems to us like there is a bit of a disconnect there, dontcha think?
Jefferies analyst Raj Denhoy offered even more of a head-scratcher for his loyal hangers-on. Denhoy kept his "buy" rating on the stock while drastically reducing his price target to $6.50 from $10, saying: "The reset under new management was expected but the severity was a surprise."
Thanks, Raj. That's like saying: "We expected the company to kick its shareholders in the groin; we just didn't think it would be that hard."
Come on, guys. There's no need to experiment with any new excuses for your bad calls simply because it's a new year. Stick with the classic and you'll be fine. Simply say: "We loved Accuray as a 'buy' at $7, but we really love it at $4.80."
What's so hard about that?
2. Sears Strikes Out
New York Yankees boss George Steinbrenner had nothing on Eddie Lampert in the game of hiring and firing his skippers.
In the latest managerial switcheroo at the iconic retailer, Sears(SHLD) announced Tuesday that Chairman Eddie Lampert will take the top job from Louis D'Ambrosio, who is stepping down due to a family member's health issue. Sears shares sank over 6% on the news that D'Ambrosio was done as CEO and Lampert, whose holding company owns over 55% of the Sears stock, was moving into the corner office.
Not that Lampert wasn't minding the store the whole time, mind you.
For those not keeping score, Lampert hired D'Ambrosio in February 2011 to replace W. Bruce Johnson. Johnson, for the record, was hired to replace Alwyn Lewis in 2008. Lewis, in case you forgot, replaced Alan Lacy, who joined Lampert's ranks in 2005 after the billionaire hedge fund manager bought Kmart out of bankruptcy and smushed it together with Sears.
Tally it up, and you'll see that Lampert's latest selection makes him Sears' fifth CEO in seven years. Heck, the only change that Lampert didn't make was bringing back Billy Martin from Yankee heaven (or Red Sox Hell) to run the former world champion retailer.
That said, tinkerer that he was, Steinbrenner was never bold (or stupid) enough to relocate from the owner's box to the dugout to manage the Bronx Bombers himself. And that, apparently, is what Eddie seems intent on doing this time, much to the dismay of the analyst community, which has repeatedly pleaded with the one-time Wall Street darling to stop fiddling while Sears burns.