Smith Barney Calls Market Bottoms in Four Sectors

Smith Barney has, in effect, just called market bottoms in four industry sectors:

Citigroup Inc.’s (C) Smith Barney unit fired at least six stock analysts this week, leading to at least a temporary suspension of coverage of the airline, gas utility, toy/leisure and semiconductor-equipment industries, people at the bank said.

The departing Smith Barney analysts and their coverage areas are: Craig Berger, semiconductor equipment; Richard Davenport, supply-chain analysis; Joanne Fairechio, gas utilities; Richard Holohan, packaging and containers; Jill Krutick, toy and leisure and Daniel McKenzie, airlines.

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Comments

  1. Greg Newton says:

    Tongue-in-cheek this item may have been, but the same shop picked the bottom of the steel market almost to the minute when it ditched its long-time Solly steel analyst Michelle Applebaum (www.michelleapplebaum.com) a couple or three years ago. Given that SOX broke out of a 13-month downtrend Friday (although the move looks less positive on weekly charts)* it seems a trend is in in place although it would take a stronger stomach than mine to be buying airlines…when it comes to that sector I’m sticking with Buffett (i.e. “Financially, the world would be better off if the Wright Brothers had crashed” or words to that effect).
    * SOX comments lifted from John Markman’s Stock Tactics Advisor

  2. Willy says:

    I know someone who works in that dept. Some of the ones let go were junior analysts that just got promoted. Needless to say morale is very, very, low.

  3. Paul K. says:

    While I’m not one of those relentlessly counter-cyclical sorts who likes to piss off average investors by calling their every action a contrarian indicator, I do believe that brokerage firms throw off some loud signals.
    For example, I bet you could form an interesting sectoral portfolio going long sectors that had just been unceremoniously dropped by major firms, as is the case above. While it’s no fun if you’re in the mix and affected by the move, from an outsider’s point of view brokers are pretty darn good at calling market bottoms. Reminds me of all the business schools around North America that launched e-commerce specialty MBAs in the early winter of 1999….