Warner Chilcott Plc (WCRX), The Boeing Company (BA), Sequenom, Inc. (SQNM): Three Recent Upgrades You May Want to Ignore

The problem is that while diagnostic sales volume is robust, the company’s costs are also high. Sequenom, Inc. (NASDAQ:SQNM) can’t seem to manage the balance of higher sales and the costs to support increased testing capacity. Thus I say that until we see significant margin improvements, and the company can prove that revenue growth can produce profits, I can’t say that the stock is a “buy.”

Conclusion

In my book Taking Charge With Value Investing (McGraw-Hill, 2013) I discuss the process of using the calls of analysts to your advantage, and how to use the information to make wiser investment decisions. First, you have to realize that the information often creates movement. Second, identify if the movement was warranted with new information that was not priced into the stock. Lastly, determine if a company’s valuation is priced to create upside. In my opinion, those in this article do not present this level of value, and I’d be cautious following the recommendation that created the movement.

The article Three Monday Upgrades That You May Want to Ignore originally appeared on Fool.com and is written by Brian Nichols.

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