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Jul28
How Did Starmine Do With Brightpoint?

I wrote on April 12, 2006 and again in an interim report on May 31 about Starmine earning predictions.  They got the direction of earnings surprises right in 8 of 10 forecasts.  We wanted to wait past the end of the next quarter to see if predicted earnings surprises would turn into stock market performance.  That is, I wanted to see if positive surprises would lead to above market performance and if negative surprises would lead to below market performance.

So what were the results?  First the index, the S&P 500 Index fell 0.60% (less than 1%) from the close on April 12 through about 10 minutes before the close on July 28, 2006.

The companies with positive predicted surprises with their results follow:

CELL    -45.78%

CSX     -   6.43%

GILD        1.78%  Our first positive and our first out performer

PD       -   5.34%

DRQ      19.29% Finally a good performer

 

Now for the negative predicted earnings surprises:

TSN      10.00%

SNDA   12.88%

RSH    -13.23% 

EMN       1.71%

FNF        8.77%

If I had invested as per the model of predicted earnings surprises I would have been wrong 8 out of 10 stocks and severely underperformed the index.  I don't think I'll add this to my quiver of investment arrows that hit their target.

 


2 Comments/Trackbacks




How exactly does Starmine determine their analyst picks?

Starmine ranks each of their analysts with up to 5 stars (best) for both the accuracy of their forecast and the profitability of their recommendations. I think they take the estimated biggest surprises from the highest ranked analysts as their picks. They report better success than my experiment most of the time. You can check them out at http://www.starmine.com.

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