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6/17/16

When sellside brokerage anal ysts get it totally wrong, BMO and Sandstorm (SAND) (SSL.to) edition

On Wednesday June 15th, i.e. two short days ago, BMO's Andrew Kaip opened coverage on Sandstorm (SSL.to) (SAND), giving the stock a "market perform" rating and a twelve month U$4.50 target price. Here's how the note began:




The very next day, his 12 month call was taken out:


We can conclude the following:

1) Kaip won't get into trouble for this because he basically called the stock higher and it went higher. Anal ysts face flak on those rare occasions they're daft/brave enough to call sell on a stock, not buy (or that ultimate get-out phrase, "market perform" linked to a tepid upside percentage call).

2) But it's not a "market perform" at all, it's obviously a "market outperform". He's done his readers a disservice by not getting them into a stock that moved 13.9% in the space of one day.

3) This can only mean that Kaip hasn't read SAND correctly. There's something very wrong with his basic assumptions and, as a public service, IKN invites said anal yst to consider just why he's got the call on this stock so obviously wrong. He may become better at his job from such a period of necessary introspection.