Molycorp Inc (MCP), Workday Inc (WDAY): Four Noteworthy Upgrades That You Should Question

Page 1 of 2

On Friday we saw several stock-moving upgrades in preparation of a long week of earnings; here are four that really caught my eye. These are upgrades that I would definitely ignore.

Molycorp Inc (NYSE:MCP)

The best of the worst

After a 64% one-year loss, Molycorp Inc (NYSE:MCP) has gained 22% over the last month, and much of those gains have been caused by analyst upgrades. Byron Capital likes Molycorp Inc (NYSE:MCP); his “Strong Buy” rating helped to push shares higher by over 2.6% on Friday. The firm calls Molycorp Inc (NYSE:MCP) the best positioned to reap the benefits of reliable rare earth minerals outside China.

First off, I don’t consider the best of the bad to be good. Secondly, I am not sure that demand is present for Molycorp Inc (NYSE:MCP) to capitalize on this reliable source that Byron Capital notes. This is a company that has been crushed because rare earth material prices have fallen, and I see no reason to believe that prices will stabilize. Hence, while Molycorp Inc (NYSE:MCP) could possibly be at the bottom of its trend, I don’t think there are enough catalysts present to call it a “Strong Buy.”

Not buying the idea of growth

After three years of declining revenue, is Xilinx, Inc. (NASDAQ:XLNX) finally entering an extended period of above industry growth? According to Citigroup, the semiconductor company is entering this period, and ramped 4G spending in China is the primary catalyst.

Xilinx, Inc. (NASDAQ:XLNX) has several products that are used in mobile infrastructure gear. My problem is that as of late we haven’t seen too many China-based predictions end favorably. China is a country with slowed growth, and at five times sales, I simply can not speculate that Xilinx, Inc. (NASDAQ:XLNX) will finally begin to produce growth – not when its failed to grow during periods of rapid Chinese expansion.

Simply ridiculous

Workday Inc (NYSE:WDAY) is fast-approaching new all-time highs, and is trading with gains over 3% on Friday. These gains were created by Oppenheimer’s upgrade to “Outperform”, as the firm says a talk with management left them confident about Workday Inc (NYSE:WDAY)’s growth potential.

Personally, I know investors who won’t touch a stock trading at 36 times earnings; therefore, at 36.5 times SALES, Workday Inc (NYSE:WDAY) is expected to have significant growth potential. Perhaps I don’t understand the valuing metric for this company, because with an operating margin of negative 38.6% and decelerating growth I can’t fathom how an analyst could possibly predict further upside. In my opinion, this is the quintessential example of a bad upgrade.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!