Buying Stocks Wall Street Hates
A list of stocks that Morningstar likes, but Wall Street hates.
With all the egg on the face of Wall Street analysts, you'd expect the number of "Strong Buy" ratings to drop, and indeed it has. While big blue chips like General Electric (GE), Citigroup (C), and AIG (AIG) still get showered with "Strong Buy" ratings, you can find many former Street darlings in the technology and telecommunications sectors with a majority of "Hold" ratings. A "Hold" on Wall Street, you'll recall, is about as negative an opinion as you're likely to hear. Two years ago, even they were a rarity.
This newfound negativity is in sharp contrast to Morningstar's opinions on many of these same stocks. If you examineour list of 4- and 5-star ratings, you'll find it peppered with stocks in the telecommunications, communications equipment, wireless communications, and phone/network equipment industries. Each of these industries landsnear the bottomof the performance tables, and true to form--love 'em when they're up, hate 'em when they're down--Wall Street is negative. (We tend to like stocks more when they become cheaper. Go figure.)
Below, I've listed stocks that don't get much respect from Wall Street, but which sport a 5-star rating from Morningstar. In our Premium Stock Selector, you can run your own screen on Wall Street Ratings versus Morningstar Ratings. You can also check Wall Street opinions for any stock in our Quicktake Reports; type in a ticker and go to the Wall Street Opinions link in the far left-hand column.
Haywood Kelly, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.