Most places where you find a collection of analysts' recommendations, they will be using a 5 point system, and they will make a consensus call based on what the majority of the stock analysts think, according to this scale.
Say, according to Morning Call, there are 9 analysts and 5 say a stock is a buy, 3 say a buy/hold and 1 say hold. You should consider this a buy. If you take the Morning Call ratings, you would give the buys 1 point for each analyst (or 5 points) and buy/hold 2 points for each analyst (or 6 points) and the hold 3 points for each analyst (or 3 points) for a total of 19 points. Divide by 9 to get 1.5, which is a buy.
The Globe & Mail no longer gives out ratings. However, Morning Call rates stocks as Buy (1), Buy/Hold (2), Hold (3), Hold/Sell (4) and Sell (5). See their recommendations at their site.
Another place to get analysts' recommendations is at 4 Traders. They use ratings of Buy (1), Outperform (2), Hold (3), Underperform (4) and Sell (5).
Possible ratings you will come across are:
|Strong Buy||Moderate Buy||Hold||Moderate Sell||Strong Sell|
|Top Pick||Buy||Hold||Don't Buy||Sell|
|Top Pick||Buy||Outperform||Market Perform||Underperform|
Got a Buy on Weakness or Watch recommendation? Generally this is because they think that the price is currently too high and it might go lower. Sometimes the "Don't Buy" recommendation is meant as a Hold.
On my other blog I am today writing about Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF) ... continue...
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