Downgrades Are Creating Entry Points

 | Apr 01, 2013 | 12:45 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

lcc

,

dsx

,

rdn

They are letting you into the hottest stocks. There are analysts downgrading the airlines today. There are some taking down the bulk shippers. I guess it is just a matter of time before they take down the mortgage insurers.

There is a remarkable lack of enthusiasm for these groups, despite the structural changes I see happening in each.

That anyone would think that the airlines should be downgraded right now, ahead of the finalization of the U.S. Airways (LCC)-AMR deal, seems just plain fanciful. When that deal closes, there will be so little competition in so many routes that the stabilization -- no more fears of price wars -- adds to the legitimacy of the move.

As for the bulk carriers, the Baltic Freight Index has been inching up and inching up, so what's the point of downgrading Diana Shipping (DSX) now, as I said earlier today?

Finally, I keep thinking that you must stay focused on the mortgage insurers, particularly Radian (RDN), because it is obvious to me that more and more houses will be built and bought.

There is an unwillingness on the part of the analysts to embrace sections of this market that have been dogs for a very long time. These critical analysts seem to think that all of these stocks and sectors are simply staging relief rallies. To me, there is structural change. These were areas where there had been intense competition, and that competition has fallen by the wayside. That means higher prices are coming, and it is still way too early to leave the table. 

Columnist Conversations

Conclusion This is a very quick note to visualize the solar stock peer group. I'll do some individual stories ...
Conclusion SSYS is one of two giants in the 3-D printing arena and is reporting earnings on November 5th, afte...
Market continues to hold onto impressive gains in the last day of a roller coaster trading month. This month ...
UPS is bumping up against a very heavy layer of resistance today. The stock's 1.6% gain has pushed shar...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.