As somewhat of a contrarian investor I have gone on record in the past about the habit of some, otherwise intelligent investors, taking an analyst’s recommendation of a stock as gospel. Too often I feel there is a blind allegiance to following analyst’s opinions.
My opinion in these matters should not be taken to mean that I see no value whatsoever in analysts- though I can see why I have that reputation. Quite the contrary, just like a neighbor or fellow investor I am often willing to listen to their perspective. The trick is to be willing to disagree with the viewpoint regardless of the source- if the facts don’t support the argument then out with the argument.
One of the higher quality sources I have seen for analyst opinions is the Standard and Poor’s 500 Guide. Produced every year it lists off the full S&P 500 with each of the analysts work ups on the stock available. The book provides a good starting off point for investigations into a company. Don’t expect to find the next great thing hiding in between the two covers. The book focuses on the good old S&P- companies that have been around for years. Each writeup contains some financial info, a general writeup from the analyst and an automated ranking. Consider it a readers digest for the S&P, not nearly enough to provide you the clarity to make a firm investing decision, but more than enough to give you an overall sense of the business and perhaps give you a few thoughts as to places to pick at when creating your own research. If the goal is to find value in companies, it sure helps if you know something about the companies to begin with.
The writer of this article received no payment or compensation for the review made above.