Analyst
Ratings Decoded
These days, it seems that every
Wall Street analyst has his or her own code for communicating when
to buy, sell or hold stocks. With help from Mick Shmlup at
Swushshlip & Schlupp Capital Management, we provide this special
report to help explain the ratings and what they mean.
Buy: This means that the
analyst has already bought the stock and wants your purchase to help
drive his investment higher.
Buy (OPM): Buy
the stock, but not with your own money.
Buy and hold: Analysts
often issue this recommendation in order to encourage you to stay
with a stock even if it fluctuates, say, losing 80% of its value.
Kiss and tell: How
analysts work with companies during an IPO.
Buy don't hold: This
is what the analysts do after they purchase stock.
Buy and hold with ten-foot barge
pole: This is reserved for
new stock issues when the analyst is pressured to make a buy
recommendation but knows the company has spent more on Aeron chairs
than on Engineering.
Strong Buy: This
means you should really buy the stock as opposed to a regular
"buy" which generally means you should sell.
Long Term Buy:
The analyst is sure that the price will change in the future, but is
not sure whether its going to go up or down. May recommend
dollar-cost averaging as a way to avoid looking stupid.
Short Term Buy:
The company may not be in business too much longer.
Accumulate: Similar
to buy, but may also be used to recommend buying de-listed stock
certificates on eBay as gag gifts for former clients.
Hold: Rather
than say "Sell", analysts will sometimes use a more subtle
recommendation indicating you should dump this sucker faster than a
beach-front rental in Afghanistan.
Source of funds: This
is code again indicating if you need short term liquidity, say to
buy groceries, you should dump this stock.
Neutral: How the analyst
feels about this week's football pool.
Above Average: The
analyst's salary and bonus.
Below Average: The
analyst's IQ.
Attractive: What
the analyst thinks of his new assistant.
Speculative hold: What
the analyst hopes to do with his new assistant.
Avoid: What
the assistant thinks of her boss.
Market Outperform: Indicates
that the stock should do better than the other losers previously
recommended.
Market Underperformer: The
analyst has already started shorting the stock.
Market Out to Lunch: Indicates
the analyst cannot figure out what is going on and starts drinking
heavily.
Market Undertaker: Best
outcome is liquidation either of the company or of the CEO.
Market Nervous: The
analyst is liquidating in his shorts.
No coverage: The
analyst has lost his job.
Sell: No
such recommendation.
