We closed this position on May 15, 2018. A copy of the associated Position Update report is here.
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3 replies to "Position Update: Knoll, Inc. (KNL)"
I don’t think it is good investment policy to recommend a stock that is Neutral. To me, Neutral means Sell (with only a few exceptions like FB where there is a lot of hype involved). I sold KNL as soon as it became Neutral, with a 23% loss. Don’t you think that you should upgrade the KNL to Attractive before presenting such a positive article? Also if KNL deserves a good article why not hype GILD, which has a Very Attractive rating?
cyosh6733@icloud.com – thank you for your comment and excellent questions.
When it comes to our editorial department or the writing of ad-hoc reports on our site, we are applying additional resources to the Ratings system.
Just as fundamental research might not represent 100% of one’s research process, neither should our Ratings. Don;t get me wrong, our Ratings are essential to making informed decisions – and while they may not make up 100% of your decision making, they should not be 0% either. The point is that there needs to be a balance in the analysis and consideration of the different factors that drive stock prices. We admit that not all drivers fo stock prices are fundamentally oriented, esp not in the short term. While fundamentals will always win in the long-term, we acknowledge vagaries in the short-term into which we aim to inject some of our editorial resources to consider non-fundamental forces or even short-term aberations in fundamentals. To summarize, We aim to bring balance in the writing of ad-hoc reports on our site by considering some non-fundamental drivers of stocks. Our Ratings remain at the core of everything we do. At the same time, they are not perfect, they are not a crystal ball for perfectly predicting the future.
Dear cyosh6733,
We appreciate your feedback. We also understand the negative connotation of a “Neutral” rating (or Hold, Equal-Weight, etc.) after decades of misuse by Wall Street Sell-Side research.
Our investment policy frees us from being bound to Wall Street stereotypes and requires us to challenge them when necessary.
The New Constructs rating system is a disciplined assessment of risk/reward that is applied without human bias. In other words, our ratings are not the subjective, malleable marketing tools that Sell-Side ratings represent.
In this context, a Neutral rating is free to enjoy its proper meaning, which in our system means the risk/reward trade-off is balanced. The risk/reward rating system is not meant to infer that every Neutral-rated stock should be sold.