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Stock Market Experts: Analyst’s, Nathan’s Famous: Case In Point

Read more articles on Finance and Cooking and Food and Investing.

February 20, 2007

Posted by neillevine

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

         

One of the first books I ever read about investing around the time it originally came out was called “The Money Game,” by “Adam Smith,” a pseudonym for a man named George Goodman, who has had a quite nice career as a financial commentator, a book, by the way, that is still being published, essentially showing the quality of his insight, if not his financial acumen, since the book is primarily ironic, consisting of stories of how wild investing research can get and not particularly specific as to exactly what to invest in.

I have also been reading “The Wall Street Journal” fairly continuously since that time. I find them quite reliable, but sometimes it pays to read between the lines. There are occasions when what you are told is not what you get. For example, when the economy declines it ofttimes it is without a lot of alarm on the part of big name commentators. On the other hand, you get the reply that they do not want to add to a panic or they will believe it when they believe it.

One thing I have learned is that it takes a good sense of perspective to deal with the stock market. Take Nathan’s Famous, NATH. Way back in 1999, there was a merger with a company called Miami Subs, essentially translating into new management for the company. This team decided they would market the company and its products better. At the time, the stock was in the $4 range. In addition, my younger brother was working at a brokerage firm. The people there did not think much of the stock.  

Well, since 2003 the stock has been rising steadily and is now around $14 with a reasonable price earnings multiple. A check of analyst’s estimates shows that no brokerage firms follow the company. What else can I say?  There apparently are a good number of companies not being followed by analysts.  This does not make them bad companies.  It is merely a gap in the system.  You don’t need an analyst’s opinion to invest in a stock and there are times they do not know any more than you do.  That is one of the things that makes the markets interesting.