Becker, who has a ''buy'' recommendation on Amazon, wasn't exactly thrilled with Suria's report. I wanted to assure them that his view wasn't my view,'' she says, explaining that Amazon is in good stead as long as it expands beyond book sales and cuts costs. And since they are paid to warn clients whether a company has adequate cash to make its debt payments, they are often ahead of the pack in predicting trouble. Equity analysts, on the other hand, are more focused on a company's growth outlook. In a vast oversimplification, equities analysts tend to look at the upside, whereas debt analysts tend to look at the downside,'' says Edward I. Altman, a professor at New York University's Leonard N. Stern School of Business.
Experts say each can provide value.
Together, they can give a much fuller picture of a company, with several caveats. Debt analysts have their biases, too. They tend to look at numbers only on a trailing, or backward-looking, basis and not at projected estimates or the potential of a company's business plan. However, because they're on the lookout for signs of weakening, debt analysts are often the first to ferret out potentially failing businesses. Likewise, such analysts are able to point out problems in an entire sector because of weakened creditworthiness.