Robo-Analysts Beat ‘The Street’

Our Robo-Analyst’s stock ratings outperform those from human analysts because they are driven by proven-superior fundamental research and unbiased decision-making.

You don’t have to take our word for it. Professors at Indiana’s Kelley School of Business and Harvard Business School prove the superiority of Robo-Analyst’s stock ratings in Human versus Machine: A Comparison of Robo-Analyst and Traditional Research Analyst Investment Recommendations. Bloomberg features the paper here.

Read the paper

Here are key quotes from the paper explaining why our ratings are superior:

Unbiased Process

• “Robo-Analysts generally follow set rules with more limited human review, allowing their recommendations to be more consistent, less susceptible to behavioral biases, and less conflicted by investment banking, trading commissions, and the need to curry favor with company management” – pp. 2, 1^st para.

More Rigorous Research

• Robo-Analysts employ a different research process that results in recommendations … more likely to incorporate information from complex disclosures.” – pp. 6, 2^nd para.

Material Outperformance

• "Portfolios formed from Robo-Analyst buy recommendations earn abnormal returns that are statistically and economically significant and are between 4 to 5 percentage points higher than human analysts when annualized.” – pp. 7, 2^nd para.
• "Our results ultimately suggest that Robo-Analysts are a valuable, alternative information intermediary to traditional sell-side analysts.” – pp 29, 2^nd para.

This article originally published on December 16, 2021.

Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector, style, or theme.