Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi team, I feel that unless I have a dividend paying stock, I should only have stocks with a buy rating. A sell rating is obvious but the hold to me means that it has reached full value so buying may not give any further upside. My question is why do so many experts have a hold rating on non-dividend paying stocks? Regards Ray
Hi Ray,
Theoretically, a BUY = the analyst thinks the share price will outperform the market. A HOLD = the analysts thinks the share will perform inline with the market. A SELL = the analyst thinks the share price will underperform the market.
However, your conclusion is very aligned to our own thinking i.e. holds are more akin to sells than buys in our experience.
Brokers are often reticent to place a Sell on a company from a business perspective for fear of alienating a particular board.
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