FNArena’s Weekly Insights – April 26 2021

In this week’s Weekly Insights:

-Analysts Versus Pessimists: The Battle Royale Of 2021?
-Icarus Explained: Charter Hall
-Conviction Calls
-Research To Download

By Rudi Filapek-Vandyck, Editor FNArena

Analysts Versus Pessimists: The Battle Royale Of 2021?

Last week, I wrote about how 3/4 of ASX stocks covered by stockbrokers is still trading below analysts’ price targets, at a time when many believe the share market is overvalued, see https://www.fnarena.com/index.php/2021/04/22/rudis-view-more-upgrades-more-potential-for-aussie-shares/

This week I can follow up with the fact that a similar discrepancy can be observed through the Buy, Hold and Sell ratings issued by those analysts for ASX-listed stocks. FNArena monitors seven leading local stockbrokers daily. This allows us to collate data that are not available elsewhere.

One set of such data are the total in Buy, Hold and Sell recommendations as carried by those seven stockbrokers, covering in excess of 400 ASX-listed companies. Contrary to what some might believe or speculate, stockbrokers do not always carry mostly Buy ratings, and history shows very distinctive patterns that might provide investors with additional insights.

When lining up all the ratings today, the first observation to make is the total in Sell ratings is near an historical low of 6.3% only. The long term average would be above 10% and the graphic below shows it can be as high as 20% which occurred in late 2013, but total percentages of Sell ratings were equally high in 2014, 2015 and in 2009.

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