The media, sections of the market and the companies themselves pay close attention to how analysts at the large investment banks rate individual companies, despite their frequent changes of opinion. Depending on the influence of the analyst in question, “Buy” calls are greeted with joy and gains, “Sell” causes concern and falls. “Neutral” calls tend to result in ambivalence and questions from the bank’s hedge fund sales desk as to why research are publishing a 40 page note advising clients to do nothing.
Earlier this week one of the investors in Aurora’s Dividend Income Trust asked me how closely we follow the stock calls offered by analysts at investment banks. In this piece we are going to run through the strengths and weaknesses of stockbrokers and how we as investors can best utilise their work to improve portfolio returns.
Read more here.