We didn’t even get a chance to celebrate yesterday’s victory with our Tenet Healthcare (NYSE: THC) pick before we got another one today. THC shares are up another 7% following yesterday’s 14.5% rally. That’s a 22.5% romp in less than 48 hours.

What causes this kind of bullish volatility just a day after a giant surge? Let’s just call it the fallout from Tenet’s good news. A lot of pessimistic analysts were caught with their pants down…they were bearish on the stock, and the company embarrassed their stock forecasting skills. Like cockroaches scurrying when the lights are flipped on (sorry…disgusting analogy, but true), all these firms are scrambling to update their opinions.

Just today, Jeffries raised their opinion to a “hold’, and Credit Suisse raised their rating to a ‘neutral’ (from underperform). I suspect we’ll see a few more stragglers submit new ratings later on this week.

First of all, a rhetorical question…what good does it do you to follow Jeffries or Credit Suisse advice if all they’re doing is responding to the same news (after the fact, no less) you and I are getting? Their tardiness left their fans holding the bag - or missing the boat - yesterday.

Second, my key point…evidenced by the previous question.

Some big-name research is good; most of it is crap. Tenet Healthcare’s a great example of how worthless many of these high-profile research outfits are.

On the chart below we’ve logged most of the key ratings changes for Tenet. Upgrades are marked with green arrows; downgrades are marked with red arrows. See if you spot the problem with the practice.

Some of the pick points were quite good. Most were not.

It’s also worth noting that the chart may be a little too deceptive in favor or the analysts. What appears to be upgrades in front of rallies or downgrades in front of plunges are actually rallies and plunges CAUSED BY the ratings change. Those weren’t actionable by the average investor - the move had already happened by the time the new rating was publicized.

Of the 16 opinion changes we see here, only eight of them were of any use to you and I. The other eight were late, or plain-old wrong.

I don’t know how you feel, but if my odds are just as good with a coin toss, I’ll do my own research and form my own opinion thank you very much.

By the way, the timing of the analyst ratings for Tenet were actually better than average. Scary.

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