Research Analyst Predictions Can Add Value

A study conducted by Czechoslovakian investment firm AKRO Investiční společnost has found that research analyst predictions based on current performance data are more accurate than those made by management teams. This according to a recent article in Enterprising Investor. The research examined analyst predictions for companies in the Nikkei 225 –which are unique in that they provide updated management forecasts each time quarterly results are released–over the 11-year period between 2006 and 2016. Findings showed… Read More

Data Shows Analysts Increasingly in Sync with the Market

Recent data from Citigroup Inc. shows that monetary stimulus has “upended conventional market dynamics” and is facilitating a “re-emergence of an intuitive relationship in equity markets,” according to an article in last week’s Bloomberg. In the period between 2012 and 2015, the article explains, the relationship between analyst opinions and market direction seemed to “break down” when global equities rose despite their downgrades. But Citigroup’s findings reflect that such opinion is now “moving emphatically in… Read More

Grantham Says ’09 Analyst Earnings Estimates Much Too High

Jeremy Grantham, manager of the $100 billion investment firm GMO, believes analysts’ 2009 earnings estimates are “vastly overstated”, writes Forbes James M. Clash. “Grantham says S&P 500 earnings could easily drop 30% to $65,” Clash says, adding that Grantham “thinks the index is close to fairly priced at its Nov. 13 close of 911. But he notes that bear markets overshoot as often as bull ones do. So he guesses that the index will bottom… Read More