Displaying items by tag: Equity Research

(New York)

A lot of of investors don’t really know what to do with Wall Street equity research. While certain analysts are very insightful, the misaligned interests and intentional underestimation sometimes make it hard to separate what to listen to from what to ignore. However, there is a clear way to make purchases based on Wall Street forecasts—when there is a heavy consensus on a stock, buy it. The key signals to look for are when price targets are similar across all analysts, and when all are saying “overweight” or buy. Such occurrences are not as common as many might think, but they are very potent when they do appear.

FINSUM: This makes some sense as equity research analysts are a reflection of the general sentiment amongst institutional investors. If all seem to be positive, then the underlying feeling on that stock is bullish.

(New York)

One of the big challenges in digesting earnings is trying to parse through what are and what are not material statements made by company executives on earnings calls. Executives at publicly traded companies have become experts at deflecting tough questions and use sophisticated and evasive language to obfuscate the direction of their companies. However, American Century Investments is debuting a new piece of language processing software which can intelligently understand the commentary and identify material versus immaterial statements, or what they call “BS”. The software is highly sophisticated in spotting not just key words, but patterns and relationships between statements. It cites four areas that can help it find BS: omission, “spin”, obfuscation, and blame.

FINSUM: This seems as though it could be a useful tool, especially as it is more sophisticated than just using key words (which people can easily adapt to).

(New York)

Being journalists ourselves, we are always on the lookout for the best content for our readers, including who to read for stock calls. That led us to a site, called TipRanks, which ranks all the equity research analysts on Wall Street. One of the major components of their rankings is their average market return per recommendation. The top ten analysts from returns are: Richard Davis, Cannacord Genuity (42.7% return per recommendation); Ross MacMillan, RBC Capital; Joseph Foresi, Cantor Fitzgerald; Matthew Hedberg, RBC Capital; Glenn Greene, Oppenheimer; Brian Schwartz, Oppenheimer; John Difucci, Jefferies; Brent Bracelin, KeyBanc; Gerard Cassidy, RBC Capital; and Brian Peterson, Raymond James.

FINSUM: This list, and TipRanks in general, is a great way to separate value from noise in all those equity research comments.