Today, here’s another fine example – from Germany – of a company and analysts telling investors that everything was fine when its chart told an entirely different story.
Hypo Real Estate Holding AG had been insisting that it wasn’t exposed to the subprime crisis.
Analysts, as of 12.11.2007 were still recommending “BUY.”
Just last week ratings agencies S&P and Moody’s had the outlook for Hypo marked “STABLE.”
Meanwhile the chart was saying “SELL” and had been doing so for some time.
Finally, today, Hypo admitted a writedown of $580m (390 million euros) on debt it had bought. Given that Hypo’s total profit last year was 429 million euros, there’ll be little if any profit this year. In today’s trading, Hypo’s shares promptly lost one third of their value.
Somewhat incredibly, Hypo’s CEO, Georg Funke commented that Hypo’s management had “not made any mistakes.” In fact he said they had done a “fantastic job.”
Sounds like another good year for bonuses then.
Here’s Hypo’s 12 months “SELL” chart with today’s 30%+ fall at the end. Below the chart are recent analyst recommendations from Hypo’s website.
Chart Recommends “SELL”
12.11.2007 Analysts Recommend “BUY”
| Institution | Analyst | Recommendation |
| Bayerische Landesbank | Dr. Frank Wohlgemuth | Buy |
| CA Cheuvreux | Joachim Müller | 1/Selected List |
| Cazenove | Piers Brown | Outperform |
| Citigroup | Kiri Vijayarajah / Jeremy Sigee / Yann Goffinet | Sell |
| Commerzbank | Michael Dunst | Buy |
| Deutsche Bank | Alexander Hendricks | Buy |
| Dresdner Kleinwort | Dr. Susanne Knips | Buy |
| DZ Bank | Matthias Dürr | Buy |
| Equinet | Dr. Philipp Häßler | Buy |
| Execution | Anke Reingen | Not rated |
| Fairesearch | Dieter Hein | Hold |
| Fox-Pitt, Kelton | David Williams | Outperform |
| Goldman Sachs | Jernej Omahen | Neutral |
| Independet Research | Matthias Engelmayer | Buy |
| JP Morgan | Francesca Tondi | Neutral |
| Keefe, Bruyette & Woods | Matthew Clark | Outperform |
| Kepler Equities | Dr. Dirk Becker | Buy |
| LB BW | Martin Peter | Buy |
| Lehman Brothers | Doreen Schmidt | Equal Weight |
| M.M. Warburg | Andreas Pläsier | Buy |
| MainFirst | Michael Rohr | Buy |
| Merck Finck | Konrad Becker | Buy |
| Merrill Lynch | Britta Schmidt | Neutral |
| Bankhaus Metzler | Guido Hoymann | Buy |
| Morgan Stanley | Ronny Rehn | Overweight |
| Natixis Securities | Alex Koagne | Reduce |
| Nord LB | Michael Seufert | Buy |
| Redburn | Garth Leder | Attractive |
| Sal. Oppenheim | Carsten Werle / Thomas Stoegner | Neutral |
| UBS | Dr. Philipp Zieschang | Buy |
| Unicredit | Kerstin Vitvar | Buy |
| WestLB | Christoph Bossmann | Buy |
| Recommendation | Number of Analysts |
Analysts % |
| Buy | 23 | 71 |
| Hold/Neutral | 7 | 26 |
| Sell/Underperform | 2 | 3 |
| Total | 32 | 100 |