Monday, March 6, 2017

GoPro In Final Crash Mode?

So many people have asked me about GoPro(GPRO) stock over the years that it's easily in my top five most inquired stocks. I get it the company has cool new products that allow us to do new things. It's edgy, new, groundbreaking, and not boring

Heck I even own a GoPro Hero recently purchased for $90 on Amazon as a gift for my wife on Christmas.  Sticking to my core principles of not wasting money on technology I avoided one of the new models selling for $400+, and opted for an older but capable model.  I'll admit it did make some cool video's, but their editing software was extremely clunky. And my wife is more than happy that we saved some money, but still have a cool new toy to make new memories with.

BUT there's just one problem with the stock!

The stock has been an absolute disaster for investors since their IPO. It's also been a huge disaster for Goldman Sach's Analyst Simona Jankowski.  Originally the company gave the stock a "Neutral" rating back in July 2015. When analysts give a "Neutral" rating they're basically saying "We don't recommend buying or selling the stock at this point, but we aren't going to stop you from doing either." At that time the stock traded around $50, and appeared to be on the cusp of heading back towards it's old highs in the $90's.

Unfortunately if you were following Goldman Sachs(GS) you would have thought it's maybe not so dangerous to buy the stock. GoPro was down a significant amount so you were buying the company at a cheaper price. Well the only problem is stocks can always get CHEAPER! Over the ensuing 19 months the stock continued to decline an additional -83%. It wasn't until today Goldman Sachs finally called it quits and stated the stock is a "Sell". In other words Goldman clients lost a substantial amount of their investments in this company if they held on thinking things were "OK" at GPRO.

In my opinion this is when they should be issuing a "Buy" rating. The stock is finally more reasonably priced on some metrics. I won't call it a buy myself since this isn't the kind of company I'd want to own for a long period of time, and I find new technology companies extremely difficult to invest in. For traders that's another story. But at this point in time the stock could be reaching what's known as a final capitulation, and reaching an inflection where a new investor might finally have a chance at making some decent money by owning shares(not a recommendation).

I have multiple points here. Analyst ratings mean absolutely nothing. I've periodically pointed that out on social media, and when I called out Superstar investors Jeff Gundlach, George Soros, and Dennis Gartman whom have no qualms about ruining your financial future with what they say on TV.

 I can honestly say I don't play games like these people. They are despicable chumps.  I take what I say very seriously, and I take the utmost pride in making sure my clients reach their financial goals. I would never tell you to invest in Gold while I was secretly selling like George Soros did. Nor would I say GoPro is a great stock to buy when their financial metrics are absolutely terrible. Yet that didn't stop analysts from all the big banks and investment firms from spewing out that type of nonsense to their clients and the public.

If you could take away one thing from this, other than giving MAD Consulting a shot at helping you reach your investment goals, it'd be that you at least ask questions about who you listen to and why for financial advice.

You can follow me on Twitter here

No comments:

Post a Comment