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Overview

Overview. S&P Stock Reports The Ranking Systems Opposition Conclusion. Standard & Poor’s Stock Reports. Sold to Financial Advisors Analysts Researchers Individual Investors Analysis of investment information Recommendation (Buy, Sell, Hold) Rankings (STARS, Value).

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Overview

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Presentation Transcript

  1. Overview • S&P Stock Reports • The Ranking Systems • Opposition • Conclusion

  2. Standard & Poor’s Stock Reports • Sold to • Financial Advisors • Analysts • Researchers • Individual Investors • Analysis of investment information • Recommendation (Buy, Sell, Hold) • Rankings (STARS, Value)

  3. Standard & Poor’s Stock Reports • Qualitative Analysis – STARS

  4. Example * (p. 1)

  5. Standard & Poor’s Stock Reports • Quantitative Analysis – Value Rankings

  6. Example * (p. 3)

  7. Standard & Poor’s Report • Additional Analytical Data • Financial Statements • Sub-industry outlook • Analyst recommendations

  8. Opposition

  9. Reliable Recommendations? “From 2005 to the third quarter of 2007, S&P rated approximately $855 billion of AAA subprime, first-lien residential mortgage-backed securities…

  10. Reliable Recommendations? …So far [2008], the company has downgraded about 17.6 percent of those securities. More than 94 percent, however, still hold an investment-grade rating” (Woellert and Kopecki)

  11. Reliable Recommendations “‘Let's hope we are all wealthy and retired by the time this house of cards falters,’ one e-mail from an S&P employee said.” (Woellert and Kopecki).

  12. The S&P Response In response… “Edward Sweeney, a spokesman for S&P, said the company has a ‘long tradition of analytical excellence and integrity.’…

  13. The S&P Response …S&P has ‘learned some important lessons from the recent crisis and have made a number of significant enhancements to increase the transparency, governance and quality of our ratings’” (Westbrook)

  14. Conclusion • S&P – Stock Reports • Qualitative & Quantitative Analysis • STARS & Value Rankings • SEC Investigation • Question Reliability • Lack of Confidence • Great Decision Making Tool • Past Performance Future Success

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