I came across an article on The Edge Singapore titled, "DBS downgrades iFAST to 'hold' with lack of near-term catalysts; Citi keeps 'sell' call with lower TP of $4.20" [news].
I remembered iFast, the fintech company because it was touted by a members only website as an example of their excellent stock picks. I also remembered some months ago how brokers were fawning over the company, EXCEPT Citi.
Citi Research analysts were the only ones who dared to stand against the crowd and recommended a "SELL". I was quite impressed with their guts.
How fast (no pun intended) the company's fortune has turned.
DBS has changed their recommendation to "HOLD" and slashed their Target Price (TP) from $8.75 to $5.42. That is an abrupt 38 percent drop.
At time of writing, Jefferies also cut their TP from $6.30 to $4.60, a 27 percent downward adjustment.
And I suspect more broker analysts will be pushing out changes to their recommendation, as soon as they are approved for release.
It is a timely reminder NOT to take brokers' TP lock, stock and barrel. As the stock climbs or falls, it is a known fact that broker analysts will adjust their TP accordingly, and you will see different sorts of reason to justify the change.
No analyst really wants to be seen standing alone. There is comfort in consensus. The lone ranger will be seen as crazily out of touch with reality, or branded as a psychic with incredible foresight.
I was not comfortable investing in iFast because I find that the company has grown too fast, too furious. Thus, it is completely normal to experience a reversion to lower numbers. I don't think iFast's operating environment and prospects have changed drastically.
However, it is evident how bullish the market was on the stock to the point of euphoria. iFast's stock price was pushed to a lifetime high of $10.10 before it started its fall from grace.
The sharp rise and fall tells me spectulators were punting on the stock, hoping to earn a quick buck from the upward momentum. Sadly, the party is over and many headed for the door. The genuine investors in the company had to endure the roller coaster ride.
There may be more pain (i.e. upfront costs) as iFast tries to assimilate the acquired UK-based BFC Bank, now renamed "iFast Global Bank". A bank is a tightly regulated entity with many compliance rules to adhere. It is a stretch to expect a fintech company to transit successfully to managing a bank overnight.
But we shall see.
iFast management will need to manage investors' expectations carefully. Otherwise, even the genuine investors will also head for the door.
I remembered iFast, the fintech company because it was touted by a members only website as an example of their excellent stock picks. I also remembered some months ago how brokers were fawning over the company, EXCEPT Citi.
Citi Research analysts were the only ones who dared to stand against the crowd and recommended a "SELL". I was quite impressed with their guts.
How fast (no pun intended) the company's fortune has turned.
DBS has changed their recommendation to "HOLD" and slashed their Target Price (TP) from $8.75 to $5.42. That is an abrupt 38 percent drop.
At time of writing, Jefferies also cut their TP from $6.30 to $4.60, a 27 percent downward adjustment.
And I suspect more broker analysts will be pushing out changes to their recommendation, as soon as they are approved for release.
It is a timely reminder NOT to take brokers' TP lock, stock and barrel. As the stock climbs or falls, it is a known fact that broker analysts will adjust their TP accordingly, and you will see different sorts of reason to justify the change.
No analyst really wants to be seen standing alone. There is comfort in consensus. The lone ranger will be seen as crazily out of touch with reality, or branded as a psychic with incredible foresight.
I was not comfortable investing in iFast because I find that the company has grown too fast, too furious. Thus, it is completely normal to experience a reversion to lower numbers. I don't think iFast's operating environment and prospects have changed drastically.
However, it is evident how bullish the market was on the stock to the point of euphoria. iFast's stock price was pushed to a lifetime high of $10.10 before it started its fall from grace.
 |
| Price of iFast Corporation Ltd over past two years (Source: Yahoo) |
The sharp rise and fall tells me spectulators were punting on the stock, hoping to earn a quick buck from the upward momentum. Sadly, the party is over and many headed for the door. The genuine investors in the company had to endure the roller coaster ride.
There may be more pain (i.e. upfront costs) as iFast tries to assimilate the acquired UK-based BFC Bank, now renamed "iFast Global Bank". A bank is a tightly regulated entity with many compliance rules to adhere. It is a stretch to expect a fintech company to transit successfully to managing a bank overnight.
But we shall see.
iFast management will need to manage investors' expectations carefully. Otherwise, even the genuine investors will also head for the door.
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