Washington Mutual (NYSE: WM) News - No He Didn't!?!

I was all ready to prepare a pre-market report this morning, when some news I saw on Washington Mutual (NYSE: WM) got me so riled up I had to throw my TV out the window.

By "The Greek"

Washington Mutual (NYSE: WM) Downgraded Today

The most interesting report to mull over today occurred last night. That of course was the bubonic plague diagnosis provided for Washington Mutual (NYSE: WM). Hey, you gotta love that analyst that downgraded WM this morning! Thanks brother, you're really adding value... I think I would downgrade him to the mail room. I mean seriously, his timing was absolutely horrible? He went from neutral to sell today, after what appears to be a four and a half year neutral position if this Yahoo Rating Change Calendar is correct. Yes, neutral through the strongest housing/mortgage market in history and then into the most disastrous period in history, thereby missing huge profits in both directions. And, now you go to sell? Why follow this company at all? I invite commentary to clarify if this data, seen at Yahoo, is correct. I want to give these guys every chance here.

Trying to Find Logic in the Midst of Chaos

I'll tell you what I thought he was thinking before looking deeper into this and without having read his note. It seemed like he was basically looking for an overly penalized (in italics because it's my presumption of his view) WM to find buyers on the news, after selling on the rumor AND NEWS for that matter! Well, that wouldn't be such a stretch after what we witnessed in Wells Fargo (NYSE: WFC) and Citigroup (NYSE: C) and the Financial Sector (AMEX: XLF) on the whole last week.

Before knowing how long he held his neutral view, I thought his cut implied he probably now believes WM is going to zero. I don't think this anymore though! The analyst's previous neutral rating turned out to be correct, but probably not correct over the time span his firm held it - if I'm seeing the data right... it looks like the firm has held a neutral ranking on WM since December of 2003! Zzzzzzzzzzzz

"He's not alone though in today's rush of brilliant gold miners to Fort Knox."

He's not alone though in today's rush of brilliant gold miners to Fort Knox. Another analyst cut his price target to $4 from $8, which better fits the "underperform" opinion that I believe he has on the stock (currently priced at $6 and change), according to Yahoo's Upgrade/Downgrade calendar. That said, the new information offered investors in the EPS report offers potentially good reason for any change. We make changes on insight gathered after exposure to new information, and it's possible to look bad when doing so.

Still, here's a little Wall Street insight you won't get anywhere else. Sometimes, actually often in what my poor innocent eyes have witnessed, analysts fit their target to match their opinion, rather than guiding their opinion by their supposedly scientifically devised price target... Ah Professor, the real world is quite different than Valuation 101 taught me, and it makes me sick. That's what my long-term goals are all about, offering a viable solution for investors, or at least a voice for the common man.

WM is up 4.8% this morning... so this analyst should be hiding under his desk or walking around the office with his shoulders lifted and a shocked expression painted on to cover up his dismay. Heck, even if the company goes bankrupt, there would be no excuse for a four-year hold rating on WM, a dynamic stock in a volatile market during that span.

There's Another Possibility

If the Yahoo Upgrade/Downgrade Calendar is incorrect (and this is important), here's another possibility of what might have happened. Post the morbid news, either this guy was so worried about his job that he panicked, or was directly told, "downgrade that dog," that he did. This happens.... I heard it more than once from a few clueless fear-mongers who use to attempt to hold kingdom over me. And not everyone is as stubborn (perhaps stupid) as me in upholding moral and ethical values regarding fiduciary responsibility over the orders of their bosses. So, I conclude by noting, since we're not wearing another man's shoes, let's offer the benefit of the doubt because there are many possibilities. Even so, I can say with certainty that these kind of things really happen.

Wednesday's EPS Schedule (abbreviated):

Aflac Inc. (NYSE: AFL), Agnico-Eagle Mines (NYSE: AEM), Airgas (NYSE: ARG), Alcon (NYSE: ACL), Allegheny Tech (NYSE: ATI), Amazon.com (Nasdaq: AMZN), Amdocs (NYSE: DOX), Ameriprise Fin'l (NYSE: AMP), Anheuser-Busch (NYSE: BUD), Ariba (Nasdaq: ARBA), AT&T (NYSE: T), ATMI (Nasdaq: ATMI), Baidu (Nasdaq: BIDU), C.R. Bard (NYSE: BCR), Cabot (NYSE: CBT), Cadence Design Systems (Nasdaq: CDNS), CEMEX (NYSE: CX), CEVA (Nasdaq: CEVA), Charlotte Russe (Nasdaq: CHIC), Chipotle Mexican Grill (NYSE: CMG), Cirrus Logic (Nasdaq: CRUS), Citrix Systems (Nasdaq: CTXS), Cobra Electronics (Nasdaq: COBR), Compuware (Nasdaq: CPWR), ConocoPhillips (NYSE: COP), Convergys (NYSE: CVG), Digi Int'l (Nasdaq: DIGI), DPL, Inc. (NYSE: DPL), EMC (NYSE: EMC), Energen (NYSE: EGN), Ethan Allen (NYSE: ETH), Fair Isaac (NYSE: FIC), FBR Capital Markets (Nasdaq: FBCM), General Dynamics (NYSE: GD), Genzyme (Nasdaq: GENZ), GlaxoSmithKline (NYSE: GSK), Grammercy Capital (NYSE: GCC), GSI Commerce (Nasdaq: GSIC), Ikanos (Nasdaq: IKAN), JAKKS Pacific (Nasdaq: JAKK), LSI Corp. (NYSE: LSI), Mattson Tech (Nasdaq: MTSN), McDonald's (NYSE: MCD), McKesson (NYSE: MCK), MEMC Electronics (NYSE: WFR), Nutrisystem (Nasdaq: NTRI), Nuvelo (Nasdaq: NUVO), OSI Pharma (Nasdaq: OSIP), P.F. Chang's China Bistro (Nasdaq: PFCB), Peabody Energy (NYSE: BTU), PepsiCo (NYSE: PEP), Pfizer (NYSE: PFE), Philip Morris (NYSE: PM), Praxair (NYSE: PX), Precision Drilling (NYSE: PDS), Pulte Homes (NYSE: PHM), Qualcomm (Nasdaq: QCOM), Robert Half (NYSE: RHI), Ryland (NYSE: RYL), Sanmina-SCI (Nasdaq: SANM), SEI Investments (Nasdaq: SEIC), Sketchers (NYSE: SKX), Susquehanna Bancshares (Nasdaq: SUSQ), Teradyne (NYSE: TER), Terex (NYSE: TEX), Allstate (NYSE: ALL), Boeing (NYSE: BA), Hershey (NYSE: HSY), New York Times (NYSE: NYT), Travelers (NYSE: TRV), Torchmark (NYSE: TMK), Tractor Supply (Nasdaq: TSCO), Tupperware (NYSE: TUP), Varian Medical (NYSE: VAR), W.R. Grace (NYSE: GRA), WellPoint (NYSE: WLP), Whirlpool (NYSE: WHR) and Wyeth (NYSE: WYE).

Article interests AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: SDS, AMEX: DOG, Nasdaq: QQQQ, NYSE: NYX. Please see our disclosure at the Wall Street Greek website.