http://www.learningmarkets.com/News-Feed/...wngrade-ede-uil-apwr.html
Friday, 30 April 2010 05:16
Jefferies gave the Electric Utilities industry some bad news as it announced a downgrade on one of its stocks.
Empire District Electric Co. (EDE) was downgraded from Buy to Hold on 4/30/2010---a negative sign for the stock that investors will have to endure. FYI, Jefferies uses the following rating scale when analyzing stocks: Buy, Hold, Underperform, Sell.
Empire District Electric Co. has an average analyst recommendation score of 2.5 and competes for investment dollars with UIL Holdings Corporation (UIL) and A-Power Energy Generation Systems, Ltd. (APWR)---two other stocks in the Electric Utilities industry that have average analyst recommendation scores of 2.0 and 1.5 respectively.
Analyst recommendations are averaged and scored using the following rating scale:
- 1.0 = Strong Buy
- 2.0 = Buy
- 3.0 = Hold
- 4.0 = Sell
- 5.0 = Strong Sell
Why are Upgrades and Initiations Good and Downgrades Bad?
One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.
Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.
Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future. -----------
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