BREAKING THE BROKER CODE

摘要

A 'buy' recommendation from, one broker is not. quite the same as a 'buy" from another, writes Patrick Commins, who provides this guide to reading between the lines. In mid-2008 explosives manufacturer Orica (ORI) was flying high. About three-quarters of the company's earnings come from mining and related activities, and with commodity prices strong its shares were trading around $30 apiece. Analysts at Macquarie were bullish. Noting the company's "relatively defensive" exposure to resources-related demand, they had an "outperform" rating on the stock. In late June commodity prices began to tumble and Orica's share price followed. As the stock slumped, the analysts released a note on July 21 saying they'd reduced their recommendation to "neutral" because of a dilutive capital raising which had reduced prospects for the total return to investors over the coming year.