Stocks with the Most Buy and Sell Recommendations

A report was recently going around highlighting that the stocks with the most sell ratings have been significantly outperforming the stocks with the most buy ratings. Below we highlight the average percentage of buy and sell ratings for stocks in each of the ten S&P 500 sectors. We also provide the percentage change for each sector since the March 9th low.

As shown in the table, the sectors with the most positive analyst ratings have indeed lagged the sectors with the most negative analyst ratings during the rally. Health Care has the most buy ratings at 57%, followed by Energy, Telecom, Utilities, and Consumer Staples. These defensive sectors have been the worst performers since March 9th. On the other hand, Financials have the most sell ratings, and they're up 68% during the rally. Analysts are typically lagging indicators, and they have moved to a defensive position in recent months. This defensive stance has caused major underperformance as the S&P has rallied 25% off its lows.

Below we highlight the S&P 500 stocks with the most buy and sell ratings.

Comments

[Moon Kil Woong:]

The biggest buy ratings always go to the largest cap companies, the companies most likely to do a stock, bond, or other corporate finance deal, and companies that have a history of good prior performance.

It shows nothing asides from the general behavior of analysts. We can draw the following conclusions about them 1) they like money and don't mind licking corporate boot to get it, 2) they are intimately tied in with corporate finance even though there is suppose to be a Chinese wall separating them, 3) they rely on companies to feed them information thus can't afford to let big companies be dissatisfied with them, 4) they won't stick their necks out to like unfavorable stocks, 5) they rely on herd mentality, 6) they tend to follow trend blindly except when the trend changes (then they like the new trend and claim they are brilliant for following it over the old trend).

Show me a guy who depends 100% on analyst views and I'll show you a guy who underperforms the market 100% of the time.

Apr 22 12:09 AM

[Old Rick:]

I wonder if we could go back and retrieve the list from 1 January 2000? That was a very useful list too. Ahh for the days of Henry Blodgett!

Apr 22 11:13 AM

[Rogerj1:]

Since this was a risk rally, it makes sense the most unloved stocks would go up the most. I wonder if the results will be the same in 3 months?

Apr 22 09:14 PM