AMD just received a devastating certificate from the investment industry. AMD has been crowned "sell of the week" by AAII Journal as investors do not seem to have not much confidence in the company right now. Navellier Ratings has given AMD another downgrade from "sell" last week to "strong sell" this week as the company's financial performance was graded with six "F" performances in eight disciplines.
F grades were given in operating margin growth, earnings growth, earnings momentum, earnings surprises, analyst earnings revisions and cash flow. A "D" was given in sales growth and an "A" was given in return on equity. The good news may be that it cannot get much worse, and that financial analysts sometimes have bad days as well and tend to be extremely moody. Some good news that is thrown in with the bad could upgrade AMD to a sell next week again.
Of course, this financial analyst reaction was to be expected after the rather sobering Q2 earnings result and the fact that the company has made mistakes in mismatching channel and OEM supply of its processors, ending up with too much supply in the channel.
There is surely some time left for AMD to improve, but it more and more seems as if the introduction of Windows 8 will be a make or break time for Rory Read's strategy to lead AMD away from the processor chase with Intel and into a much more consumer-oriented space.