Beware of Analyst RatingsI have observed that a lot of posts here consitute analyst reviews accompanied by a recommendation to "BUY". As a long term investor, I just wanted to give everyone the heads up regarding analyst recommendations that originate with the big brokerage houses.
It may come as a surprise to some of you that you are NOT getting unbiased "advice". If these analysts were truly free to speak their minds and give independent advice, logically investors should expect to see "recommendations" evenly split among "BUY" "HOLD" and "SELL".
But that never happens. The brokerage house will rarely issue a "SELL" recommendation because they eventually hope to be a part of a future underwriting syndicate with hefty underwriting commissions, and may wish to get future information from a company they are covering. Issuing a SELL recommendation effectively means the analyst will get the door slammed in their face when it comes to requesting future company information, and more importantly, his or her firm will NOT be participating in new financings or earning the lucrative fees from such endeavours..
Often a "HOLD" recommendation is a euphemism for "SELL". But you will rarely observe recommendations to SELL. Analysts who work for a brokerage firm are more interested in moving product (shares) since there is much more money to made from IPOs and secondary offerings than there is to be made from retail investors like you and me.
Many of these analyst reports are well-researched and contain valuable information, and for that reason many investors read them. But please be aware that there are huge potential conflicts of interest, and never ever think you are getting unabiased independent research for free.
Just my advice for what its worth to the novice investors on here. Many of you with years of experience will already know that analyst recommendations should be viewed with some healthy skepticism. It's perfectly OK to read these reports, but when it comes down to surrendering your hard earned money always follow up with your own due diligence and reach your own independent conclusion. Best of luck to all.