In previous articles, “Analyzing the Analysts – Buy, Hold Or Sell†and “Buy Stock Recommendations from Top Analystsâ€, we analyzed the “buy†recommendations of the stock market research analysts. In this article we analyze the “sell†recommendations of the stock market research analysts.
It’s generally not the aim of the analysts to recommend positions for going short, but it might be interesting to see how good the analysts are at getting out of positions. The analysts’ “going long†philosophy makes sense, as it is possible to make huge returns with long positions, as the largest return possible with a short position is 100%, double your money.
For this analysis, the buy recommendations of the analysts were ignored except for exiting previous “sell†recommendations. As in the previous articles, the results of this analysis include only stocks listed on the Nasdaq, NYSE and American stock exchanges going back to February of 1998 and does not include stocks that have merged, have been purchased, de-listed or have gone bankrupt.The results of the analysis are show below:
(optionable stocks are shown as links)
| Analyst | Start Date | End Date | Best Pick |
Best Pick % Ret. |
Worst Pick |
Worst Pick % Ret. |
#Co.’s Covered |
% Correct |
Avg % Ret. |
| AG Edwards | Mar-98 | May-06 | MLNM | 86% | AMLN | -2585% | 119 | 37% | -72% |
| BB&T Capital Mkts | Feb-03 | May-06 | CENF | 78% | XPRSA | -158% | 30 | 47% | -7% |
| Banc of America Sec | Aug-00 | Jun-06 | ASYT | 68% | AKAM | -582% | 151 | 39% | -21% |
| Bear Stearns | Jun-99 | Jun-06 | ITWO | 69% | TSO | -1206% | 149 | 36% | -38% |
| Bernstein | May-01 | Mar-06 | SAPE | 45% | AEOS | -524% | 26 | 27% | -68% |
| Brean Murray | Jan-03 | Jun-06 | DNDN | 59% | EZPW | -125% | 24 | 46% | -10% |
| CIBC World Market | Jun-99 | Jun-06 | GTW | 95% | UPL | -811% | 193 | 37% | -45% |
| Citigroup | Aug-05 | May-06 | BLDP | 40% | PLXS | -77% | 69 | 49% | -4% |
| Credit Suisse | May-99 | Jun-06 | PME | 87% | MT | -637% | 213 | 37% | -31% |
| DA Davidson | Dec-02 | Jun-06 | ABY | 37% | PLB | -119% | 50 | 38% | -12% |
| Deutsche Securities | Jun-02 | Jun-06 | DCN | 96% | CKFR | -227% | 128 | 30% | -31% |
| First Albany | Sep-02 | Jun-06 | SCON | 93% | COP | -163% | 38 | 34% | -20% |
| Friedman Billings | May-00 | Jun-06 | CIEN | 65% | FMD | -158% | 80 | 45% | -12% |
| Goldman Sachs | Dec-98 | Jun-06 | MAG | 80% | ETP | -705% | 210 | 34% | -29% |
| Harris Nesbitt | Apr-04 | Apr-06 | BCGI | 90% | CSGS | -45% | 39 | 59% | 0% |
| J.P. Morgan | Jun-01 | Jun-06 | KKD | 83% | MTSN | -456% | 364 | 29% | -31% |
| JMP Securities | Feb-03 | Jun-06 | ITWO | 69% | JNPR | -103% | 48 | 40% | -17% |
| Janney Montgomery | Jun-98 | May-06 | AMZN | 45% | DTPI | -196% | 24 | 46% | -14% |
| Jefferies | Apr-98 | Jun-06 | XIDE | 76% | AX | -329% | 89 | 44% | -17% |
| Keefe Bruyette | Mar-01 | Jun-06 | FBP | 63% | BLK | -270% | 48 | 40% | -16% |
| KeyBanc Capital Mkts / McDonald | Oct-04 | Jun-06 | PLB | 58% | BLI | -139% | 26 | 50% | -5% |
| Lehman Brothers | Jun-99 | Jun-06 | DCN | 96% | OMG | -333% | 209 | 31% | -30% |
| Matrix Research | Dec-05 | Jun-06 | LTRE | 33% | CNC | -168% | 67 | 63% | 1% |
| Merrill Lynch | Apr-98 | Apr-06 | YBTVA | 85% | USG | -499% | 182 | 35% | -38% |
| Moors and Cabot | Apr-04 | Feb-06 | SYMC | 36% | ASYT | -82% | 26 | 65% | 0% |
| Morgan Keegan | Jul-02 | May-06 | CENF | 44% | ATSI | -900% | 26 | 35% | -51% |
| Morgan Stanley | Sep-00 | Jun-06 | MANU | 71% | SOHU | -1085% | 307 | 30% | -42% |
| Needham | Nov-98 | May-06 | AGEN | 61% | RIMM | -484% | 23 | 52% | -35% |
| Oppenheimer | Mar-04 | May-06 | SKYF | 15% | KMG | -49% | 20 | 25% | -10% |
| Piper Jaffray | Aug-98 | Jun-06 | CIPH | 71% | AX | -329% | 56 | 52% | -5% |
| Prudential | Aug-00 | Jun-06 | UTSI | 76% | VTIV | -2181% | 209 | 34% | -39% |
| RBC Capital Mkts | Nov-01 | May-06 | SMRA | 96% | UPCS | -1654% | 153 | 29% | -59% |
| Robert W. Baird | Dec-99 | May-06 | DCN | 96% | RIMM | -834% | 62 | 34% | -32% |
| Ryan, Beck & Co. | Oct-02 | May-06 | PLNR | 33% | ECLP | -304% | 26 | 46% | -30% |
| Sandler O’Neill | Oct-04 | May-06 | IMH | 40% | AX | -329% | 24 | 63% | -23% |
| Stanford | Dec-04 | Jun-06 | INCX | 65% | WG | -72% | 20 | 65% | 2% |
| Stifel Nicolaus | Aug-04 | Jun-06 | PLB | 80% | FRT | -125% | 20 | 50% | -6% |
| Sun Trust Rbsn Humphrey | Apr-02 | Jun-06 | KRI | 89% | MDRX | -604% | 30 | 47% | -31% |
| Thomas Weisel | Jun-03 | May-06 | GLGC | 71% | AMKR | -156% | 29 | 31% | -21% |
| UBS | Sep-03 | Jun-06 | AGEN | 78% | TSO | -704% | 170 | 37% | -22% |
| WR Hambrecht | Jul-02 | Feb-06 | ALT | 90% | BJ | -179% | 20 | 30% | -42% |
| Wachovia | Feb-02 | Jun-06 | SAPE | 81% | CCRT | -586% | 120 | 39% | -29% |
| Wedbush Morgan | Jan-03 | Mar-06 | SGTL | 56% | WTSLA | -452% | 20 | 30% | -41% |
The best analysts for recommending a sell appear to be the analysts at Stanford and at Matrix Research, both analysts exhibiting positive returns when following their sell recommendations. Also, from this analysis, it appears investors might experience better returns by buying when the some of the analysts recommend a “sell†and selling when some of the analysts recommend a “buyâ€. For example, the analyst AG Edwards had an average return of 51% in the previous “buy†analysis article, but for the “sell†analysis AG Edwards exhibited a –72% return. But if the trades had been reversed, buying when AG Edwards recommended selling and selling when AG Edwards recommended buying, an investor would have experienced a positive 72% return instead of a negative 72% return, representing a superior return than buying when AG Edwards recommends buying and selling when AG Edwards recommends selling. Other analysts besides AG Edwards also included in the distinguished “contrarians†group include Bernstein, WR Hambrecht, Wedbush Morgan, RBC Capital Mkts, Needham, Thomas Weisel, Sandler O’Neill, CIBC World Market, Oppenheimer, and Robert W. Baird.
For option investors seeking a stock option strategy for “going short”, there are several strategies available, Bear Call Credit Spreads and Bear Put Spreads for example. Poweroptions provides a search engine for finding potential option income generating positions for various strategies for those option investors seeking to “go shortâ€.
[tags]Stock Analysts, Contrarian Stock Trading, Option Income, Option Investors, Stock Market Research, Optionable Stocks[/tags]