|
Sun 12 May 2002 10:17
by Kevin McGehee
in Coweta County, GA
[Our Times]
[Flyover Blogdom]
|
Those interested in the recent trend of public school districts outsourcing management of their schools, might be interested to read this Fox News report about stock analysts criticizing Edison along with airline Jet Blue.
US Bancorp Piper Jaffray analyst Mark Marostica downgraded Edison Schools to “market perform,“ the firm’s second-lowest rating and reduced his price target for the stock from $32 per share to $3.
Shares of Edison Schools, the largest private operator of public schools in the United States, plunged 41 percent because of Marostica’s doubts about the company’s prospects of landing more schools to manage.
Piper Jaffray spokeswoman Erin Freeman said the firm is a longtime advocate of analyst independence and that the report “was based on fundamental research which we strongly support.“
Still, investors should be skeptical about most analyst reports, said Robert Aliber, an economics and finance professor at the University of Chicago Graduate School of Business.
That’s because brokerages that provide analyst services make much of their money off investment banking, and provide their research as a side benefit to clients. Clients want their stock recommended in return.
Edison doesn’t really have any major competitors that I’m aware of, who might benefit from pressuring an analyst to offer an exaggeratedly crappy verdict.
Too bad the report doesn’t go into detail about what Piper Jaffray found wrong with Edison.
|
