Brokers have a job to do and that is generate business for their firms. If a client does not own a particular stock, they would be trying to get you to buy a stock. So the broker is doing his job.
It is rare for a broker to come out with a "sell" recommendation in print as that broker would not get any business from the company if and when a capital raising is involved. So maybe today's "hold" recommendations are masked euphemisms for "sell".
Most of the outright "sells" I have seen are from the CFD research reports.
To the untrained eye, TIM is a stock with assets, a reported (perhaps inflated) NTA much higher than today's share price from memory. It also has a lot of debt. You can see from the financials that there is almost $500 million of grower debt.
Read some of the earlier posts as there might be something useful there on the likelihood of investors (who sought tax shelters) to pay back this debt. So this debt burden and other factors are making it important for TIM to sell assets as announced by CEO of company. TIM is in a similar position to other companies who want to sell assets to retire debt. Who will buy assets right now?
I am long TIMPB and hope they pay the interest coupon. With TIMPB converting to 4 TIM at sp under 50 cents in Sep09, I see no reason why people are buying TIM in preference to TIMPB. At TIM=11 cents today, TIMPB should be 44 cents and that is WITHOUT the 13.5 cents of interest payment which hopefully will be paid. That is telling me that the market is worried that TIMPB may not be around to convert in Sep09.
Please ask your broker why he likes TIM in preference to TIMPB. I would be very interested in the answer.
TIM Price at posting:
10.5¢ Sentiment: LT Buy Disclosure: Held
