It caught my attention when I heard an analyst upon a well-liked financial news program tell investors to sell a heap because too many analysts liked the company, citing the fact that there were no sell ratings.
It seemed perfectly critical to me that analysts wouldnt be telling investors to sell 3M (MMM), which has one of the most consistent clear earnings chronicles in the records of the accretion markets. But inborn suspicious of conflicts of immersion in the middle of brokerage firms and analysts I fixed to get a bit of fact checking anyway.
While the hoard did not have any sell ratings at the epoch of writing, there were quite a few preserve ratings. Now I feel compelled to diverge here and say that the maintain rating seems quite illogical to me. If a buildup is good tolerable to keep its good ample to buy, and vice versa if you wouldnt desire to purchase it after that you shouldnt desire to sustain upon to it either.
As it turns out, the average analyst rating for 3M was isolated slightly and insignificantly improved than the average for all stocks in the Dow Jones Industrial Average, of which the company is a component.
But what was most engaging very nearly the ratings on Dow components was that, despite numerous and deafening genuine problems, AIG (AIG) was tied as soon as General Electric (GE) and Du Pont (DD) for the third best rating, solitary bested by Citigroup (C) and Microsoft (MSFT). AIG was actually more intensely recommended by analysts than J.P. Morgan Chases (JPM) and American manner (AXP).
This didnt pull off much for my confidence in analyst ratings.
So I dug a little deeper looking at the more statistically significant S&P 500. What I found was that companies in the index like the worst revenue do something did actually carry more sell ratings than companies in the manner of the best performance.
At least analysts were using the sell rating, something they seldom did in the past.
There was, however, a significant bias towards the asexual Hold rating for all stocks indicating reluctance upon the portion of analysts to commit to buy and sell recommendations.
Mark Mahorney
MarketSpectator.com
BlogginWallStreet.com
MarketBlog.com
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