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.
Using analyst ratings from Reuters that are presented on a linear scale (with 1 = "Strong Buy" and 5 = "Strong Sell"), we collected the ratings data of stocks exhibiting the technical “golden cross,” in which the stock’s 50-day moving average crosses above its 200-day MA. We sliced these ratings 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 bullish 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-off point for your own analysis.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
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.)
Do you think these stocks will outperform like analysts expect? Use this list as a starting point for your own analysis.
List sorted by market cap.
1. Anadarko Petroleum Corporation (APC): Engages in the exploration and production of oil and gas properties primarily in the United States, the deepwater of the Gulf of Mexico, and Algeria. Market cap of $35.56B. SMA50 at $77.15 vs. SMA200 at $75.63 (current price at $74.50). Mean average rating changed from 2.03 to 1.94 between 09/20/11 and 10/20/11 (bullish change).
Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 0.22%. Analysts also got it right between 10/20/11 and 11/19/11, with the mean rating changing from 1.94 to 1.97 (bearish change). Over the following month, the stock generated an alpha of -6.72% relative to the S&P 500 index, as predicted by the analysts.
This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.97 to 1.93 between 11/19/11 and 12/19/11 (i.e. bullish change). It's been a rough couple of days for the stock, losing 8.24% over the last week.
2. Allscripts Healthcare Solutions, Inc. (MDRX): Provides clinical, financial, connectivity, and information solutions and related professional services to hospitals, physicians, and post-acute organizations primarily in the United States. Market cap of $3.29B. SMA50 at $19.19 vs. SMA200 at $19.15 (current price at $17.94). Mean average rating changed from 1.7 to 1.67 between 09/20/11 and 10/20/11 (bullish change).
Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 1.9%. Analysts also got it right between 10/20/11 and 11/19/11, with the mean rating changing from 1.67 to 1.71 (bearish change). Over the following month, the stock generated an alpha of -9.97% relative to the S&P 500 index, as predicted by the analysts.
This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.71 to 1.68 between 11/19/11 and 12/19/11 (i.e. bullish change). It's been a rough couple of days for the stock, losing 5.66% over the last week.
3. Oasis Petroleum Inc. (OAS): Engages in the acquisition and development of oil and natural gas resources primarily in the Williston Basin. Market cap of $2.52B. SMA50 at $29.45 vs. SMA200 at $28.37 (current price at $28.71). Mean average rating changed from 1.58 to 1.68 between 09/20/11 and 10/20/11 (bearish change).
Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -4.82%. Analysts also got it right between 10/20/11 and 11/19/11, with the mean rating changing from 1.68 to 1.87 (bearish change). Over the following month, the stock generated an alpha of -5.19% relative to the S&P 500 index, as predicted by the analysts.
This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.87 to 1.79 between 11/19/11 and 12/19/11 (i.e. bullish change). It's been a rough couple of days for the stock, losing 7.06% over the last week.
Ratings sourced from Reuters; price data sourced from Yahoo! Finance; all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
