Once again, it’s time to analyze the stock research analysts*. Finding perfect data is probably impossible, as we analyzed several sets of data and found all of them to have flaws. The primary issue causing most of the flaws in the data related to incorrect handling of stock-splits.
We recalculated the performance of the stock research analysts with better data, and with the new data the overall result of the stock research analysts is poorer. Of course the market has retreated since our last article possibly contributing to the poorer performance of the stock research analysts. The average success rate dropped from 60% in the previous article to 47%. Previously we found 71% of the stock research analysts outperformed the S&P 500 index ($SPX) and in this analysis we found 56% of the stock research analyst outperforming the S&P 500 index. The results of our analysis is shown below:
| Analyst | Start Date |
End Date |
Best Pick |
Best Pick % Ret. |
Worst Pick |
Worst Pick % Ret. |
Succ. Rate |
Avg % Ret. |
Excess % Ret. Over S&P 500 |
| AG Edwards |
8-Apr-98 | 18-Jul-06 | SWN | 786% | ANLT | -100% | 61% | 35% | 23% |
| Adam Harkness |
27-Mar-98 | 17-Jan-06 | CTSH | 4894% | EMRG | -100% | 40% | 19% | 6% |
| Am Tech/ JSA Research |
27-Jun-05 | 18-Jul-06 | AMKR | 102% | CNCT | -55% | 27% | -7% | -11% |
| Avondale Partners |
11-Aug-03 | 13-Jul-06 | PSYS | 378% | TRMM | -72% | 48% | 11% | -15% |
| B. Riley | 30-Apr-02 | 10-Jul-06 | CRDN | 1269% | CDIC | -68% | 52% | 43% | 28% |
| BB&T Cap. Mkts. |
31-Mar-00 | 14-Jul-06 | PPDI | 845% | VERT | -100% | 63% | 42% | 59% |
| Banc of America Sec |
26-May-99 | 17-Jul-06 | VLO | 1211% | ICGE | -100% | 54% | 24% | 29% |
| Barrington Research |
23-Jul-99 | 13-Jul-06 | CECO | 335% | PRGX | -96% | 55% | 26% | 35% |
| Bear Stearns |
20-Mar-98 | 18-Jul-06 | KWK | 1725% | GOAM | -100% | 50% | 32% | 19% |
| Bernstein | 2-Aug-01 | 31-Mar-06 | AET | 291% | PIR | -70% | 64% | 29% | 28% |
| Brean Murray |
18-Aug-98 | 17-Jul-06 | ASFI | 349% | AKSY | -85% | 39% | 2% | -10% |
| CE Unterberg Towbin |
15-Oct-98 | 27-Jun-06 | CNQR | 623% | RBAK | -100% | 31% | -8% | -26% |
| CIBC World Market |
27-May-99 | 18-Jul-06 | NUAN | 1285% | RBAK | -100% | 47% | 24% | 27% |
| CL King |
16-Dec-04 | 17-Jul-06 | CMRG | 62% | PQE | -66% | 41% | -2% | -5% |
| Calyon Securities |
31-Mar-05 | 18-Jul-06 | DNR | 102% | UAUA | -31% | 52% | 2% | -3% |
| Canaccord Adams |
31-Jan-06 | 14-Jul-06 | NCST | 56% | XXIA | -37% | 25% | -5% | -2% |
| Caris and Co. |
17-Jun-03 | 18-Jul-06 | CELG | 450% | GENR | -91% | 33% | -5% | -27% |
| Citigroup | 2-Aug-05 | 17-Jul-06 | HANS | 226% | XMSR | -55% | 47% | 2% | 3% |
| Cowen and Co. |
4-Mar-98 | 5-Jul-06 | PPDI | 560% | ARDM | -98% | 39% | 20% | 2% |
| Credit Suisse |
27-Feb-98 | 18-Jul-06 | FTO | 2419% | VERT | -100% | 59% | 45% | 27% |
| DA Davidson |
23-Dec-98 | 7-Jul-06 | AMIE | 585% | PTMK | -90% | 58% | 26% | 25% |
| Deutsche Sec. |
5-Apr-02 | 18-Jul-06 | MDR | 1040% | DRL | -89% | 58% | 26% | 16% |
| Dougherty and Co. |
27-Feb-01 | 14-Jul-06 | TASR | 438% | WLSN | -75% | 52% | 21% | 23% |
| FTN Midwest |
9-Jan-04 | 18-Jul-06 | CHRW | 105% | ALGN | -63% | 54% | 4% | -6% |
| Ferris Baker |
17-Nov-98 | 18-Jul-06 | DECK | 659% | LOUD | -90% | 53% | 21% | 12% |
| First Albany |
25-Feb-02 | 13-Jul-06 | SWN | 794% | DOVP | -90% | 46% | 16% | 5% |
| First Analysis Sec |
15-Sep-99 | 1-Jun-06 | TTI | 1511% | ARBA | -99% | 45% | 37% | 43% |
| Fortis Bank |
23-Jan-02 | 9-Jun-06 | AMLN | 356% | GENR | -90% | 45% | 5% | -5% |
| Friedman Billings |
24-Apr-98 | 18-Jul-06 | NEU | 1241% | ITWO | -98% | 54% | 39% | 27% |
| Global Crown Cap. |
16-Aug-05 | 7-Jul-06 | ENMC | 24% | ASPM | -55% | 40% | -6% | -7% |
| Goldman Sachs |
20-Feb-98 | 18-Jul-06 | RYL | 1085% | ICGE | -100% | 59% | 38% | 18% |
| HSBC Sec. |
27-Apr-98 | 11-Jul-06 | BRG | 254% | FTE | -79% | 45% | 9% | -5% |
| Harris Nesbitt |
23-Jul-03 | 16-Jun-06 | TXU | 335% | PARS | -90% | 51% | 1% | -24% |
| Hibernia Southcoast Cap. |
20-Oct-04 | 26-Apr-06 | BMRN | 159% | CRIS | -72% | 65% | 16% | 4% |
| Hilliard Lyons |
20-Apr-98 | 23-Jun-06 | TOFC | 23% | SRT | -26% | 57% | 1% | -9% |
| Investec | 6-Jun-02 | 13-Jan-06 | LIFC | 1382% | ESST | -89% | 68% | 91% | 71% |
| J.P. Morgan |
19-Mar-98 | 17-Jul-06 | NAFC | 683% | ICGE | -100% | 57% | 27% | 13% |
| JMP Sec. |
2-Jul-02 | 14-Jul-06 | TCC | 299% | GNTA | -90% | 46% | 8% | -22% |
| Janco Part. |
4-Oct-04 | 12-Jul-06 | BWNG | 79% | COOL | -85% | 36% | -6% | -15% |
| Janney Montg. |
17-Feb-99 | 12-Jul-06 | URBN | 738% | VERT | -100% | 61% | 32% | 31% |
| Jefferies | 8-Apr-98 | 17-Jul-06 | VTIV | 1160% | RBAK | -100% | 53% | 34% | 22% |
| Kaufman Bros |
3-Feb-99 | 7-Jul-06 | ENTU | 885% | FTGX | -100% | 29% | -5% | -2% |
| Keefe Bruyette |
10-Mar-98 | 18-Jul-06 | NEU | 1364% | PXT | -86% | 68% | 28% | 12% |
| KeyBanc Cap. Mkts/ McDonald |
7-Apr-04 | 17-Jul-06 | ISRG | 620% | JAS | -56% | 60% | 16% | 8% |
| Ladenburg Thalman |
19-Oct-98 | 23-May-06 | ASCA | 1097% | VLTS | -100% | 44% | 15% | -1% |
| Lazard Captial |
8-Nov-05 | 22-Jun-06 | NTRI | 33% | CELL | -60% | 21% | -13% | -14% |
| Leerink Swann |
29-Jul-03 | 20-Jun-06 | ILMN | 193% | DYAX | -78% | 40% | -5% | -30% |
| Lehman Brothers |
25-Feb-98 | 14-Jul-06 | FRO | 2761% | ICGE | -100% | 57% | 31% | 12% |
| Longbow | 16-Aug-04 | 14-Jul-06 | TIE | 238% | PLAY | -62% | 59% | 19% | 4% |
| Matrix Research |
5-Jan-06 | 17-Jul-06 | SKX | 58% | PLAY | -62% | 25% | -6% | -3% |
| Merrill Lynch |
24-Feb-98 | 3-Apr-06 | XTO | 1716% | VERT | -100% | 59% | 46% | 26% |
| Merriman Curhan Ford |
23-Oct-03 | 12-Jul-06 | CORT | 453% | SQNM | -86% | 29% | -5% | -25% |
| Miller Johnson |
21-Jan-04 | 27-Jun-06 | SMSI | 151% | TRMM | -60% | 45% | 9% | 1% |
| Moors and Cabot |
23-Sep-03 | 22-Feb-06 | MU | 52% | ASYT | -77% | 54% | -5% | -25% |
| Morgan Joseph |
14-Jan-05 | 27-Jun-06 | AKAM | 119% | XMSR | -63% | 34% | -4% | -8% |
| Morgan Keegan |
28-May-98 | 17-Jul-06 | QSII | 1418% | LJPC | -88% | 50% | 56% | 43% |
| Morgan Stanley |
4-Mar-98 | 18-Jul-06 | YHOO | 801% | GOAM | -100% | 56% | 27% | 9% |
| Needham | 17-Nov-98 | 17-Jul-06 | HOLX | 682% | MSGI | -100% | 38% | 2% | -7% |
| Nollenberger Cap. |
20-Oct-05 | 10-Jul-06 | WEBX | 32% | PALM | -38% | 26% | -6% | -11% |
| Oppenheimer | 9-Sep-03 | 17-Jul-06 | TSO | 389% | VION | -75% | 42% | -3% | -24% |
| Pacific Crest |
31-Mar-99 | 19-May-06 | FFIV | 489% | VERT | -100% | 42% | 9% | 13% |
| Pacific Growth Equit. |
17-Dec-99 | 1-Jun-06 | CWTR | 772% | ITWO | -99% | 39% | 9% | 22% |
| Piper Jaffray |
23-Feb-98 | 14-Jul-06 | STRL | 2498% | PRGX | -98% | 46% | 17% | -2% |
| Prudential | 15-Apr-98 | 18-Jul-06 | DNB | 757% | IPIX | -100% | 58% | 41% | 30% |
| Punk Ziegel |
29-Jul-98 | 17-Jul-06 | CTSH | 521% | CTIC | -93% | 37% | 13% | 3% |
| RBC Cap. Mkts |
6-Nov-01 | 13-Jul-06 | MDR | 701% | TPC | -93% | 57% | 22% | 11% |
| Robert W. Baird |
17-Mar-00 | 14-Jul-06 | WCC | 578% | ITWO | -100% | 55% | 17% | 33% |
| Rochdale Securities |
22-Mar-06 | 14-Jul-06 | WR | 8% | BOBJ | -47% | 15% | -10% | -5% |
| Rodman and Renshaw |
30-Sep-02 | 29-Jun-06 | JCOM | 314% | ALT | -96% | 32% | -15% | -67% |
| Roth Cap. |
20-Mar-00 | 13-Jul-06 | UHAL | 1480% | MBAY | -99% | 48% | 34% | 49% |
| Ryan Beck and Co |
9-Oct-02 | 18-Jul-06 | ADSK | 360% | ALT | -97% | 55% | 15% | -44% |
| Sanders Morris Harris |
28-Mar-03 | 29-Jun-06 | VLO | 562% | PIR | -70% | 58% | 31% | -12% |
| Sandler O’Neill |
15-Nov-04 | 16-Jun-06 | NDAQ | 137% | NPTE | -44% | 59% | 9% | 5% |
| Soleil | 23-Dec-05 | 14-Jul-06 | PTMK | 32% | WIND | -47% | 30% | -11% | -8% |
| Southwest Sec |
1-Jan-99 | 4-Jan-06 | PNRA | 1032% | ARTG | -96% | 45% | 37% | 26% |
| Stanford | 9-Nov-04 | 18-Jul-06 | BMRN | 169% | SGTL | -87% | 50% | 3% | -3% |
| Stephens Inc |
11-Mar-98 | 23-May-06 | SWN | 1097% | HAXS | -100% | 59% | 51% | 35% |
| Stifel Nicolaus |
31-Mar-00 | 30-Jun-06 | BTU | 703% | ELOY | -92% | 51% | 24% | 41% |
| Sun Trust Rbsn Humphrey |
23-Aug-01 | 18-Jul-06 | PSYS | 476% | CHTR | -91% | 50% | 17% | 11% |
| Susquehanna Financial |
30-Nov-04 | 12-Jul-06 | SKX | 68% | ANDS | -71% | 30% | -10% | -15% |
| ThinkEquity | 14-Apr-03 | 23-May-06 | DNA | 343% | BPUR | -94% | 39% | 0% | -40% |
| Thomas Weisel |
17-Jun-99 | 18-Jul-06 | STRM | 560% | RBAK | -100% | 40% | -4% | 4% |
| UBS | 20-Jun-03 | 18-Jul-06 | LQU | 409% | DRL | -89% | 52% | 10% | -14% |
| WR Hambrecht |
10-Feb-00 | 18-Jul-06 | GRMN | 405% | RBAK | -100% | 43% | 3% | 16% |
| Wachovia | 26-Apr-00 | 18-Jul-06 | URBN | 799% | VITR | -96% | 55% | 18% | 33% |
| Wedbush Morgan |
8-Sep-99 | 18-Jul-06 | URBN | 356% | DLK | -99% | 47% | 6% | 14% |
| William Blair |
30-Jul-99 | 17-Jul-06 | JLL | 560% | JDSU | -97% | 50% | 11% | 18% |
*We analyzed the record of the stock research analysts going back to February 1998 for all current stocks listed on the Nasdaq, NYSE and American stock exchanges. Stocks for companies going belly up or delisted are not included as are companies that have been acquired by or merged with other companies, and stock research analysts without a recommendation issued in 2006 were also not considered. For this analysis, we assumed “market outperform” means a buy, “market underperform” means the stock is to be sold, etc. Another issue we must take into consideration is that stock research analysts sometimes recommend a stock investment strategy for a buy, and then cease to cover the stock, but never issue a stock trading strategy for a sell recommendation, for this case we just assumed we’re supposed to continue holding the stock.
[tags]stock research, stock trading, investment strategy[/tags]