Six Flags Entertainment Corp (SIX), Overstock.com, Inc. (OSTK) & More: Did These Analysts Make the Right Calls?

Page 1 of 2

Related Tickers: Six Flags Entertainment Corp (NYSE:SIX), Overstock.com (NASDAQ:OSTK), Newcastle Investment Corp. (NYSE:NCT)

During earnings season, analysts are hard at work to issue revised outlooks, upgrades, downgrades, etc. While many of these calls will move stocks on the call alone, investors shouldn’t fall victim to buying only because of the upgrade. In this piece, I am assessing three calls to determine whether they are good or bad and if the notes warrant the calls.

Newcastle Investment Corp. (NYSE:NCT)

On Friday, shares of Newcastle Investment significantly outperformed the market with gains of more than 4%. The gains were caused by a reiterated “Buy” rating from UBS, with a $14 price target. Currently, a $14 target would insinuate 40% upside. However, the firm explained its call by describing its 14% one-month loss as unwarranted, saying the loss is due to the concerns of a delayed New Residential spinoff. UBS believes that this delay is due to additional filing requirements associated with the acquisition of HSBC servicing assets.

So basically, UBS claimed that presumed fears of the New Residential spinoff are meaningless. While this may be true, UBS is predicting 40% upside on a stock that has lost 14% from this concern. UBS has already said that it believes New Residential is worth $8 per share and that NCT is a deep value stock.

When you look at the fundamentals, you almost have to agree. The stock is a bit pricey, and it has very little room for margin growth. However, 20% fundamental growth this year is very attractive in this economy. The key is if UBS is right about New Residential. But either way, investors must understand that it is a speculative call, one that is risky.

Six Flags Entertainment Corp (NYSE:SIX)

Credit Suisse initiated coverage on Six Flags with an “Outperform” rating and a price target of $87.00. The stock has seen gains of 60% over the last year and Credit Suisse believes it will continue. According to the firm, “upgraded parks, improved marketing, renewed focus on pricing, operating efficiencies, and a healthier balance sheet” are all among the reasons that the firm is bullish moving forward.

Credit: Six Flags Entertainment Corp (NYSE:SIX)

Personally, I love this call. Not only are the reasons for the bullish call accurate, but I also consider it to be a responsible call from a respected firm. Far too often analysts make crazy calls for gains of 40%, 60%, even 100%, and often they are trying to make headlines, following the lead of another analyst, or trying to move a stock. Looking at Six Flags Entertainment Corp (NYSE:SIX), a 22% premium looks fair based on its current valuation compared to fundamentals and the factors noted by the analyst. I say it was a great call!

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 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

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!