Ten Analyst Calls That Made You 60-Plus Percent in 2012
We have come to recognize analyst ratings are a special breed of financial news that can yield profitable trading signals when caught early and approached the right way. They do go awry often, but when they work, they can produce some spectacular returns. Below are ten analyst calls made in 2012, each producing over 50 percent return thus far.
10. Bank of America on SOL: 52%
Bank of America downgraded ReneSola Limited (NYSE: SOL) from Buy to Underperform on March 23 of this year, and reduced its price target from $6.50 to $2. SOL opened at 2.53 on that day. If you shorted the stock, which currently trades at $1.22, you would have been up 52.16 percent.
9. Auriga on JKS: 53%
Auriga downgraded JinkoSolar Holdings (NYSE: JKS) on February 14, from Hold to Sell. Shares traded at $8.60 at the start of that session. Had you gone short (plenty of opportunity to do so as shares reached as high as $8.85), you would have locked in a 53.3 percent in profit with today's $4.02 price. Of course, shares traded as high as $9.45 on Feb 21, so you would have needed enough resolve to suffer a nearly 10-percent drawdown on the position (for a day).
8. Cantor Fitzgerald on EGLE: 53%
Cantor Fitzgerald moved on March 15 to downgrade Ealge Bulk Shipping (NASDAQ: EGLE) from Hold to Sell with a $1 price target. You would have needed steel nerves to hold on to a short trade on this stock from its opening price of $6.88, as shares went as high as $8.28 (a 20+ percent drawdown on the trade). If you held on, however, you't sit at a healthy 53.6 percent right now, with shares at $3.19 a share.
7. Deutsche Bank on TC: 54%
On February 28, Deutsche Bank moved to downgrade Thompson Creek Metals Company (NYSE: TC) from Hold to Sell and reduced their price target from $8.50 to $7.50. If you'd gone short at the opening price of $8.01, you'd have a nice 54.3 percent profit, as shares trade at $3.66.
6. UBS on RDEA: 55%
On April 12, UBS initiates Ardea Biosciences (NASDAQ: RDEA) with with a Buy rating and a $31 price target. This is where shares trade today ($31.96), so if you had assumed a long position at the $20.59 price, you'd be in good shape with a 55.2 percent profit. That, of course, would have meant your patience was enough to hold on to the trade without exiting until April 23rd, when shares really took off.
5. Piper Jaffray on CKEC: 56%
On March 7, Piper Jaffray upgraded Carmike Cinemas (NASDAQ: CKEC) from Neutral to Overweight and announced a $10 price target. Shares opened at $8.58 and have since blown past the target price and on to $13.36 as of the time of this writing. The profit on that long position? A cool 55.7 percent.
4. Wunderlich Securities on AONE: 56%
Wunderlich Securities downgraded A123 Systems (NASDAQ: AONE) from Hold to Sell on February 9, and reduced its price target from $3 to $0.50. Had you taken that short signal at the opening price of $2.32, you'd have made 56.47 percent as price reached $1.01.
3. DNB Markets on FSLR: 61%
When DNB Markets moved to downgrade First Solar (NASDAQ: FSLR) to Sell from Hold on February 29, FSLR traded at $33.70. Since then, shares have regressed to $13 per share, which means that a short sale at that open would have netted you $61.42 percent.
2. BMO Capital Markets on ARNA: 71%
BMO Capital Markets upgraded Arena Pharmaceuticals (NASDAQ: ARNA) from Market Perform to Outperform on May 9, and raised price target from $1 to $7. Shares are almost there, up from an opening price of $3.79 at the time of the call. A long position would have returned 71.5 percent.
1. Ascendiant Capital Markets on RPRX: 87%
And finally on April 10, Ascendiant Capital Markets initiated Repros Therapeutics (NASDAQ: RPRX) with a Strong Buy rating and a $6 target price. Shares opened at $4.16 and have worked their way to $7.79 a share, for a whopping 87.2 percent return since, thus fully deserving that bullish call and more. Had you been on that trade, you would have doubted yourself for the first week, as shares dropped as much as 11.5 percent before rallying.
Collectively, these ten stocks returned 60 percent.
Which calls are more profitable, bearish or bullish? Stay tuned for our report coming soon!
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