How much trust do you have in analysts evaluation of a companys stock?

Question

i realize there isnt one single factor that determines the future performance of a stock, im just curious if you put any weight into an analysts recommendation.

personally i think, because they've invested time and money to determine if the company is in a favorable position, there's certain to be some truth in their findings.....i'm just curious how valuable investors consider that information.

Answer 1

Itsy bitsy tiny weenie bit of truth. They just put the stock on my radar screen. I can't tell you in this format what I really think about their buy, sell, hold opinion.

Answer 2

I think analysts are often way behind the curve.  Goldman Sachs recently downgraded GM from neutral to sell.  The stock was over $40 last October, and Goldman didn't get around to putting it on a sell list until it was $12.  If these guys really knew what they were doing, they would make recommendations before the stock moved, not after.

Answer 3

Great Question.

I find that the reports written by the analysts contain several nuggets of truth that are of interest.  They do all of the hard work for you, and then you can make your own decision.

When it comes to their OPINION, I couldn't care one way or another. Rarely do you see a sell rating, and rarely do you see all buys on a stock.

Analysts work for their firm first, and the firm makes money first. This means that when they like a stock and put a buy on it, they almost always bought the shares 10 percent cheaper.  They then sell their shares into the volume of people buying on their recommendation.  

Simply Put: They do a lot of gruntwork and can give you good insight into the company, but their opinion should never outweigh your own.

Answer 4

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