A research analyst who can make you laugh all the way to the bank?
Impossible, you say.
Well, meet François Parenteau, Wall Street gunfighter. Parenteau is Jesse James, Black Bart and Billy the Kid all rolled into one. He writes research reports with guns blazing. We figure he pounds out his short-sell recommendations with blood oozing on his knuckles.
The scrappy 38-year-old Canadian thinks nothing of going toe-to-toe with those fiction writers masquerading as analysts on Wall Street. He also speaks English, which, on Wall Street, is a foreign language. He doesn’t make you read between the lines.
“Manugistics,” he wrote three years ago in a report titled Consultants Suck! “is on its way down. It’s obvious. And the solution is as easy as picking clean underwear with ‘Monday’ sewn on it. Sell it.”
The consultancy firm sucked, all right. The stock tanked from $51 to as low as $2.24.
Parenteau is totally independent, totally hilarious, totally serious and brutally honest all in the same paragraph. Probably, he only read half of Dale Carnegie’s book, How To Win Friends And Influence People.
The best part is that Parenteau’s research (www.parenteaucorp.com) is also free. Send him your e-mail address and he’ll send you his reports. No strings attached.
Last year, Parenteau’s tiny shop was ranked No. 2 among independent stock research houses with an average return of 94.1 per cent on the 25 stocks it covers. The Quebec native, who specializes in unearthing obscure companies with a common-sense approach, has also recently been recognized as the top U.S. independent equity analyst by Business Week magazine.
His firm, Parenteau Corp., could charge a bundle for his research, but he gives it away. His company reaps profits by investing in the companies it researches. He is Don Cherry in a T-shirt. Loved by investors. Loathed by analysts. Oh, and his girlfriend weighs 115 pounds and asks him every week if she needs to lose weight.
Yup, these bottom-line stats found their way into a research report on Pediatric Services of America. In the same report Parenteau refers to Wall Street as “a bunch of enthusiastic guys with good haircuts and no tattoos, well camouflaged in pinstriped suits . . . these generous souls never lack money-making ideas – money making for themselves, that is – and upbeat comments . . . ”
In October of 2002, Parenteau upgraded VeriSign to a buy from a sell when it was trading at $4.34. It’s up 300 per cent on that call. In that note, Parenteau didn’t forget to pay tribute to Raimundo Archibald, a J.P. Morgan analyst who once had a $220 US target on VeriSign at the same time as Parenteau was recommending investors sell or short-sell the shares at $184.
“Our friend Raimundo is nowhere to be found and has been replaced by another savvy Morgan analyst named P. Sterling Auts,” Parenteau wrote. “Mr. Auts initiated coverage on VeriSign February 15/02 with a buy at $26.02 US. On September 25/02, he took a more conservative stance, rating the shares neutral while it was trading at $6. We truly hope these upstanding Morgan men have families of their own because we doubt they are getting much love outside their homes . . .”
In his screaming-sell report on consultancy firm Manugistics, Parenteau steamed: “We hate consultants! They sit around with their too-short or too-long hair and funny-looking ties. They tilt their heads to the side, look pensive and pretend to listen. But they don’t. They’re just waiting for us to shut up so they can vomit their ‘knowledge.’ Consultants don’t know squat . . .”
Parenteau, who soon plans to launch the Defiance Hedge Fund to the public, ripped into the 15 analysts who had buys on Palm (PALM-Nasdaq) at $41 US three years ago thusly: “I suspect they probably think Palm is an excellent buy at almost any price, which is about as dumb as you get in this game. Sorry, guys, but the way we see it, the stock will be trading at $5 before long.”
Which it was. When Palm promptly headed south to well below $5, none of those analysts were heard confessing their sins. Yet, when Parenteau’s Cannondale Corp. (BIKEQ-Nasdaq) buy recommendation at $3 US plummeted to 25 cents, he finally advised investors to sell, saying he “apologizes profusely.”
Even if Parenteau happens to screw up and you take a bath, one thing’s sure.
This is an analyst who will be sure to make you laugh, while all around him are making investors cry.
HOT STOCK: RAND A. TECHNOLOGY CORP.
Up $1.44 (+92.9%) on 1,229,900 shares (for week ending March 5).
With tech investors all giddy again, a company can sure ride the coattails of a business partner a long way. Check out the action on Rand, which spiked on news it has become IBM’s biggest partner in Product Lifecycle Management (PLM) sales in 2003, with sales of approximately $30 million in that space. The weekly double puts the Mississauga, Ont., outfit up 500 per cent year to date.
COLD STOCK: FORZANI GROUP
Down $3.48 (-20.8%) on 2,338,100 shares (for week ending March 5).
Stock in the Calgary-based sporting goods retailer tumbled as the company slashed its earnings forecast for the fiscal year ending Feb. 1 to .85 - .87 from $1.01 - $1.05, citing weakness in the sector. CEO Bob Sartor said the sector weakness was a “golden opportunity to gain fairly significant market share” with competitors struggling or going bust. To many shareholders, flying the coop was the golden opportunity.