In honor of the latest “sell” rating on Hewlett-Packard (HPQ), this time coming from Jefferies and Co. (article found here), we’d like to give the “Stock Quote of the Day” to UBS for their sell recommendation of HPQ at the worst possible time (sell recommendation here). On January 11, 2011, UBS gave a “buy” recommendation of HPQ when the stock was trading at $44.86 (buy recommendation here). On August 7, 2012, over a year later and after a -58% decline, UBS finally gave a “sell” rating on HPQ.
A “sell” rating on HPQ after the stock has decline so much in the last two years does not do justice to the use of a buy or sell rating. We’re not suggesting that HPQ is a “buy” at this point in time. However, this is traditionally when values are confirm through additional due diligence. If a person had already held shares of HPQ, the only reason to sell at this point is if you believe the company is going out of business within the next twelve months.
Is it any wonder that investors tend to buy high and sell low?