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Analyst ratings are a great start when searching for companies with exciting prospects, but finding groups of analysts that have a history of predicting stock performance is even better.

Just as analyst optimism is a reason to take a closer look, analyst pessimism is also reason to look deeper.

Using analyst ratings from Reuters that are presented on a linear scale (with 1 = "Strong Buy" and 5 = "Strong Sell"), we sliced the ratings data of the 200 largest stocks by market cap (the “mega-cap stocks”) into three monthly time periods, and identified the groups of analysts that have shown predictive value over two consecutive time periods.

We further narrowed down the list by only focusing on those stocks that have seen bearish trends in recent analyst opinion.

Although past performance is no guarantee of future results, the recent accuracy of these analyst ratings suggests their opinions may be a helpful starting point for your own analysis.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬‬


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We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Click to enlarge

Do you think these groups of analysts will be right once again? Use this list as a starting point for your own analysis.

List sorted by market cap.

1. AT&T, Inc. (T): Provides telecommunication services to consumers, businesses and other service providers worldwide. Market cap of $173.69B. Mean average rating changed from 2.21 to 2.15 between 08/02/11 and 09/01/11 (bullish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 8.34%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 2.15 to 2.16 (bearish change). Over the following month, the stock generated an alpha of -9.93% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expects the stock to underperform in the future, with the mean rating changing from 2.16 to 2.26 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has gained 8.12% over the last year.

2. Pfizer Inc. (PFE): A biopharmaceutical company, offers prescription medicines for humans and animals worldwide. Market cap of $150.27B. Mean average rating changed from 1.83 to 1.74 between 08/02/11 and 09/01/11 (bullish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 0.38%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 1.74 to 1.78 (bearish change). Over the following month, the stock generated an alpha of -2.88% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 1.78 to 1.79 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has gained 13.96% over the last year.

3. Statoil ASA (STO): Engages in the exploration, production, transportation, refining and marketing of petroleum and petroleum-derived products. Market cap of $81.09B. Mean average rating changed from 2.71 to 2.75 between 08/02/11 and 09/01/11 (bearish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -4.78%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 2.75 to 2.67 (bullish change). Over the following month, the stock generated an alpha of 9.01% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 2.67 to 2.75 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has had a good month, gaining 18%.

4. Hewlett-Packard Company (HPQ): Offers various products, technologies, software, solutions and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health and education sectors worldwide. Market cap of $52.87B. Mean average rating changed from 2.21 to 2.56 between 08/02/11 and 09/01/11 (bearish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -4.78%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 2.56 to 2.52 (bullish change). Over the following month, the stock generated an alpha of 5.85% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 2.52 to 2.58 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has had a good month, gaining 18.53%.

5. Deutsche Bank AG (DB): Provides investment, financial and related products and services. Market cap of $39.71B. Mean average rating changed from 2.33 to 2.35 between 08/02/11 and 09/01/11 (bearish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -6.21%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 2.35 to 2.26 (bullish change). Over the following month, the stock generated an alpha of 12.12% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 2.26 to 2.35 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has had a good month, gaining 19.65%.

6. Enterprise Products Partners LP (EPD): Provides midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products, and petrochemicals in North America. Market cap of $39.23B. Mean average rating changed from 1.52 to 1.5 between 08/02/11 and 09/01/11 (bullish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 3.66%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 1.5 to 1.57 (bearish change). Over the following month, the stock generated an alpha of -2.08% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 1.57 to 1.62 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has had a good month, gaining 13.18%.

7. Imperial Oil Ltd. (IMO): Engages in the exploration, production and sale of crude oil and natural gas in Canada. Market cap of $34.94B. Mean average rating changed from 3.27 to 3.33 between 08/02/11 and 09/01/11 (bearish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -10.26%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 3.33 to 3.2 (bullish change). Over the following month, the stock generated an alpha of 9.4% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 3.2 to 3.21 between Return between 09/01/11 and 10/01/11 and Return between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has had a good month, gaining 14.15%.

8. Halliburton Company (HAL): Provides various products and services to the energy industry for the exploration, development and production of oil and natural gas worldwide. Market cap of $34.38B. Mean average rating changed from 1.51 to 1.53 between 08/02/11 and 09/01/11 (bearish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -24.6%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 1.53 to 1.52 (bullish change). Over the following month, the stock generated an alpha of 16.25% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 1.52 to 1.53 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has had a couple of great days, gaining 5.78% over the last week.

9. Newmont Mining Corp. (NEM): Engages in the acquisition, exploration and production of gold and copper properties. Market cap of $32.95B. Mean average rating changed from 2.25 to 2 between 08/02/11 and 09/01/11 (bullish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 10.01%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 2 to 2.1 (bearish change). Over the following month, the stock generated an alpha of -8.39% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 2.1 to 2.14 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has gained 10.66% over the last year.

10. The Dow Chemical Company (DOW): Manufactures and supplies products used as raw materials in the production of customer products and services worldwide. Market cap of $32.93B. Mean average rating changed from 2.33 to 2.41 between 08/02/11 and 09/01/11 (bearish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -13.33%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 2.41 to 2.37 (bullish change). Over the following month, the stock generated an alpha of 15.6% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 2.37 to 2.45 between 10/01/11 and 10/31/11 (i.e. bearish change). This is a risky stock that is significantly more volatile than the overall market (beta = 2.31). The stock has had a good month, gaining 24.13%.

11. Carnival Corporation (CCL): Operates as a cruise and vacation company. Market cap of $27.37B. Mean average rating changed from 1.8 to 1.76 between 08/02/11 and 09/01/11 (bullish change).

Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 1.38%. Analysts also got it right between 09/01/11 and 10/01/11, with the mean rating changing from 1.76 to 1.71 (bullish change). Over the following month, the stock generated an alpha of 4.9% relative to the S&P 500 index, as predicted by the analysts. This same group of analysts now expect the stock to underperform in the future, with the mean rating changing from 1.71 to 1.73 between 10/01/11 and 10/31/11 (i.e. bearish change). The stock has had a good month, gaining 16.2%.

*Ratings sourced from Reuters, price data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 11 Mega-Cap Stocks Predictive Analysts Expect To Underperform