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发帖数: 656 | 1 http://finance.yahoo.com/news/The-Impact-Of-SellSide-investopedia-3199626780.html?x=0
The Impact Of Sell-Side Research
Kristina Zucchi, On Friday June 18, 2010, 4:18 pm EDT
If you've ever watched a financial news program, you've probably heard the
reporter reference "analysts". These analysts, called sell-side analysts,
are believed to provide an unbiased opinion based on proprietary research on
a company's securities. Sell-side analysts do not buy or sell stocks and
bonds. Rather, they make recommendations on how they believe the stock or
bond will perform. These analysts use investment jargon that is often
difficult to decipher, yet they have great influence on the movement of
stocks in the short-term. Understanding the role of the sell-side analyst
should shed some light on the short- term movement of stocks.
How Sell-Side Research Works
Sell-side analysts typically follow a similar work path, which is: an
analyst meets with a company's management team, discusses the sources of
revenues, products or services and develops a financial model based on the
company's estimates as well as the analyst's expectations. The analyst then
maintains a constant watch over the company, reviewing many sources of data
to determine if s/he feels confident with his/her model or makes revisions
based on new information. The analyst often puts a label, called an
investment rating, on the company's stock or bonds - usually in terms of "
buy", "sell" or "hold". The estimates derived from the models of several of
the sell-side analysts also can be averaged together to come up with a
single expectation called the "consensus" estimate.
Sell-side research is often "marketed" to firms called buy-side investment
managers - these are the investment professionals that make the purchase and
sale of securities. Examples of these firms include pension or mutual fund
managers. Buy-side firms do not usually pay for or buy the sell-side
research outright. Usually the buy-side firm pays soft dollars to the sell-
side firm, which is a roundabout way of paying for the research. Soft
dollars can be thought of as extra money paid when trades are made through
the sell-side firms. So in essence, the sell-side analysts' research directs
the buy-side firm to make trades through their trading department, creating
profit for the sell-side firm.
There is an inherent conflict within a sell-side firm, although, due to past
legal settlements, this conflict should be removed. The conflict is this:
analysts' make recommendations to buy or sell a company's securities. These
companies often are also clients of the sell-side banks-paying fees to the
banks for investment services. Investment banking is a huge source of profit
for the banks, and if an analyst makes a negative recommendation, the
investment banking side of the business may lose that client. Secondly, the
analyst needs access to a company's management team. If the analyst is
negative, occasionally the company may deny access, making researching a
company very difficult.
Investment Jargon
As purveyors of news, financial reporters tend to reference sell-side
research. The reporters discuss investment terms such as consensus estimates
, investment ratings and reported vs. revised. During earnings season, these
news programs often discuss consensus numbers, usually comparing an actual
company financial report to the consensus estimate. If a company beats the
consensus estimate, its security usually rises in price, while the opposite
occurs if a company misses the estimate. So despite whether or not a company
has a profit or loss, its security can rise or fall in price, based on
missing or beating expectations. However, there are times when a company
beats consensus estimates and the security falls. Why does that happen?
Occasionally sell-side analysts fail to revise their estimates, but their
expectations do change. Sometimes financial news will refer to a "whisper
number". A whisper number is an estimate that is different from the
consensus estimate. This whisper number becomes the newest, although
unwritten, consensus expectation.
Analysts also tend to put investment ratings on the securities. These
ratings are a way to qualify how the analyst views the potential for stock
price appreciation. When an analyst changes his/her rating, the security's
price may change. This depends on how close investors follow the analyst's
recommendations. An upgrade generally tends to increase the price while a
downgrade does the opposite. However, it is not only the change but the
reason for the change that is important to understand.
Sell-side analysts often make changes to a company's financial reports to
reflect ongoing operations rather than one-time items that may impact a
current quarter's results. These changes get incorporated into the financial
model that the analyst develops for the company and impacts the
expectations or estimates. Analysts refer to the changes as revised numbers
versus the actual numbers reported.
Impact of Sell-Side Ratings on Stock Prices
The rating that analysts place on a company's stock often impacts the stock
price in the short term. When an analyst "initiates" coverage on a company,
s/he usually assigns a rating in the form of "buy", "hold" or "sell". This
rating is a signal to the investment community, portraying how the analyst
believes the stock price will move in a given time frame. The rating can
sometimes be a reflection of the expected stock movement, and not a
reflection of how the analyst feels the company will perform. For example,
if the company has very strong growth prospects in the next six months and
the stock is undervalued based on the analyst's estimates, then a "buy"
rating may be placed on the stock. Conversely, weak growth prospects may
warrant a "sell" rating. However, if the same company has strong growth
prospects, but the stock price has increased to such a point that it has
exceeded estimates and is considered overvalued, the analyst may place a "
sell" on the stock. After the initial rating is placed on the stock,
analysts may update the rating. These updates result in upgrades (from a "
sell" to a "hold" or "buy") or downgrades (from a "buy" to a "hold" or "sell
").
Conclusion
Financial media frequently refer to sell side research notes when discussing
the potential or actual movements in stocks. Understanding the impact of
this research is crucial for investors to answer critical questions like why
does a stock move when there is no recent news on it or the industry or why
does a change in investment rating impact the stock price and what does all
this mean for the long- or short-term stock price? Without acknowledging
the "pull" that sell-side research has on the short-term price movement of
stocks, investors may take this price movement to mean something else, thus
making an erroneous investment decision. | M*****g
发帖数: 3145 | 2 他们到底扮演什么角色，只有他们自己知道。
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