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As if the daily dose of negative macroeconomic news crushing investors here in Australia were not enough, on 28 May 2012 a leading international provider of building maintenance and technical services went under.  Hastie Group was no more.

While the administrators attempt to sort through the wreckage, the blame game has already begun in earnest.  Hastie executives are blaming reluctant banks for refusing to go along with the latest in a long string of debt restructuring efforts.  Investors are pointing the finger at the company’s auditor, Deloitte & Touche.  The former Leighton Holdings Executive brought in to save Hastie Group is now decrying the multiple mistakes of previous management.

In the midst of all this there is the concern over the more than 2,000 jobs that may be lost, with substantially less concern for the fate of the holders of Hastie ordinary shares.  Investors faced the risk and now they will pay, and pay dearly.

Forgetting about the blame game for the moment, should any investor with a stake in the Hastie Group be surprised?  While no one can predict the future with certainty, were there warning signs that clearly indicated the risks involved with this company were simply too high?  While

Where do average retail investors like us go to minimize the risk of losing everything in the total collapse of one of our holdings?  Can we learn to spot another Hastie in the making and run for the exits like a stampeding herd of cattle?

Many of us rely on analyst opinion.  Since they are professionals, we assume they know more than we do and would certainly sound an alarm of impending doom in the face of events that should be obvious.  The Hastie story provides an ideal case study to test that assumption and to perhaps learn how to add our own analysis to the mix.  If you are willing to put in the time, you have access to many of the same numbers and business events the analysts do.

The following table uses data from FN Arena to summarize analyst ratings for Hastie group over the past year and a half.  We eliminated some months where there was no substantial change.  Here is the table:

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Buys

Holds

Sells

Average Target Price

Average EPS Estimate

April 2012

0

0

2

$0.295

-$0.038

March 2012

1

2

1

$1.13