Broker recomendations

wheezergeezer

Well-known member
368 8
Can anyone tell me what do the following recomendations mean,

Underweight, overweight,..........Fat broker?

overperform, underperform.........must try harder?

I can understand the buy of sell recomendation but can't figure out the rest.........thanks in advance
 

BBB

Experienced member
1,071 3
The 1st 2 regard an assets recommended weighting in portfolio composition. Eg underweight means dont have too many of these in your portfolio.

The last 2 are an indication/opinion of how an asset is performing against its peers.
 

frugi

1
1,827 126
Or the cynics view :D

Broker with no vested interest in the stock but who wishes to maintain a good relationship with the company in question -

Buy - flattering to company but really means hold
Hold = sell
Sell (rare as rocking horse faeces) = sell as fast as you can

Broker with vested interest -

Buy = virtually all the profit has been made in our holding of this stock but we'd like you to jack up the price a little more before we sell it all to you at the top.
Hold = we're holding this too and want to avoid any selling panics while also enjoying the opportunity to quietly accumulate more at a good price.
Sell = this is undervalued and we want to buy some cheaply

Meaningless or self evident -

Outperform or overweight = it has a higher beta than its index and we're in a bull market
Underperform or underweight = it has a lower beta than its index and we're in a bull market
(Reverse these two in a bear market)
 

mully

Established member
967 3
These institutional client terms stem from the need of IBs not to offend corporate clients. No corporate client, especially any prospective client likes to see a sell note. Underperform/underweight is felt less offensive.

That explains why you see so few outright sell recommendations. The target might one day be a potential corporate (read lucrative in fee terms) client
The most famous recommendation was the Cannot Recommend A Purchase applied to Maxwell in the 1990's.
 

wheezergeezer

Well-known member
368 8
Frugi and Mully, thank you both for the realistic , non Bulls**ite, version of recommendations, I do understand much better now,

Regards, wheezergeezer
 
 
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