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TCBY's thorn-in-the-side.

TCBY's Thorn-In-The-Side

While TCBY stockholders apparently put a lot of stock in what Shearson Lehman Hutton analyst Caroline Levy says of the $145-million frozen yogurt company, the trade magazine Institutional Investor doesn't value her opinion as highly.

Levy, you'll recall, is the Shearson analyst whose buy-and-sell recommendations have driven the stock both up and down over the past year. TCBY stock was selling at about $25 a share last summer when Levy predicted the shares would sell for $32.50 within twelve months. The stock began climbing promptly.

But July 3 of this year, levy lost her love for the frozen food treat, downgraded her earnings estimates and issued a near-sell recommendation on the stock. TCBY shares quickly plunged over $3 a share to a low of $14.63.

To some observers, Levy's learned opinions lead TCBY's stock price around like a dog on a leash, but Levy's peers at Institutional Investor magazine view her opinions with more skepticism. The magazine's October issue ranked analysts on their "All-American Research Team" and Levy just barely made the cut.

Levy didn't make the first team; she didn't make the second team; and she didn't make the third team. Her number was finally called as Levy nailed down one of the three runners-up slots.

Maybe it's her accent -- British? -- that has given her words such power in the marketplace. It's hard to sound dumb when you talk like that. Her New York City answering machine message, "please leave your name and number at the sound of the tone," sounds like an edict from the queen.

But one local broker contacted agrees with Levy's analysis and says TCBY's problems are real, citing an analogy to explain why.

"Other ice cream stocks have been pushing all time highs, for example, Dreyers, International Dairy Queen, and Ben and Jerry's. Industry stocks are like schools of fish -- they tend to swim together." The market is seeing a "classic divergence" between TCBY and other industry stocks now. Investors pay close attention to divergence, and TCBY's fish are swimming the wrong way. peers.
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Title Annotation:not everybody shares Caroline Levy's analysis of stocks of TCBY Enterprises Inc.
Publication:Arkansas Business
Date:Jul 30, 1990
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