4. Analyst Recommendations - The NASDAQ Dozen

Now that you have determined the basic fundamental health of your stock, you will want to get an idea of what the professionals think about the stock by reviewing analyst recommendations. To find the analyst recommendations on a stock, click on the Analyst Research link under Stock Analysis in the left menu (see Figure 8) and then click on the Recommendations link at the top of the Stock Research page (see Figure 9).

For more information on understanding analyst research and recommendations, visit Learning Markets.

Analyst Research Link
Figure 8—Analyst Research Link
Why We Look at Analyst Recommendations

Analysts conduct extensive research on a stock and then issue a recommendation as to what they think the future holds for the company. If the company's future outlook is positive, the analysts recommend a "buy." If the company's future outlook is poor, then the analysts recommend a "sell."

How to Score Analyst Recommendations
  • Pass—Give analyst recommendations a passing score if the consensus recommendation is a buy or strong buy.
  • Fail—Give analyst recommendations a failing score if the consensus recommendation is less than a buy.

Looking at the consensus recommendation for WMT in Figure 9, WMT should receive a passing score. Out of 27 total analysts, 1 of them recommended a "buy" while 13 analysts recommended a "strong buy."

Analyst Recommendations: PASS

Recommendations Link
Figure 9—Analyst Recommendations

  All content in this article is supplied by Wade Hansen of Learning Markets. To learn more about their investor education offerings, please visit learningmarkets.com. Find more great articles from Learning Markets in our news sections.

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