Most Wall Street
analysts and investors tend to focus on return on equity as their primary measure of company performance.
Analysts and investors tend to spend very little time on Goodwill when looking at financial statements.
Not exact matches
However,
investors shouldn't pay too much attention to those vagaries in performance, because currency movements are notoriously difficult to predict
and tend to even out, noted BlackRock
analysts.
Wall Street
analysts lack the independence to deliver truly objective research,
and what little truly high - quality research exists
tends to be too expensive for the average
investor to access.
Smaller companies, by virtue of their vast numbers, limited market liquidity,
and resultant lower
investor demand,
tend as a category to have very light
analyst coverage.
Long - term buy -
and - hold
investors tend to analyze in the same or highly similar ways as do control
investors, distress
investors, credit
analysts and first
and second stage venture capitalists.
Unfortunately, unless they are careful, companies
tend to have more excess cash toward the end of the good part of the cycle, at which point increasing leverage is ill - advised, but often happens because of pressure from activist
investors and sell - side
analysts.
They, also,
tend to be the most followed by
analysts and investors.
This emphasis on earnings from operations as reported
and on perceptions of growth by
analysts and money managers permitted these people to ignore rather completely other factors that
tend to be extremely important in any balanced analysis for which GAAP is useful: e.g., strength of financial positions; understanding the underlying business;
and appraising management not only as operators
and stock promoters, but also as
investors of corporate assets
and financiers of businesses.
While other
analysts tend to believe a stock will either go up or go down, value
investors are content to say «I don't know» on a majority of stocks,
and only invest in the ones they are relatively sure about.