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Analyst calls, how should these be translated?

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Analyst calls, how should these be translated?

Hi James and the MM team, Thanks for the daily broker updates / moves. However can I please ask that you put out a "translation" for some of the not so obvious or common terms. For example "underweight". Does this mean that the investor should reduce/sell their holdings? Another is "underperform". Does this mean the share price is below where it should be and therefore a buy? - Thanks, Jan

Answer

Hi Jan,

MM will be offering some education later in the year which should hopefully help all subscribers understand our market rhetoric, we do try and keep it to a minimum but sometimes that can’t be avoided.

We all understand SELL, HOLD, BUY. The equivalents are listed below.

SELL is the same as underweight, underperform, reduce, lighten etc. Essentially the analyst believes the stock will perform below the market so a lesser weight than the market is recommended. For example if CSL is 8% of the index and the broker has a underweight call, then they are suggesting a position less than 8%.

HOLD is the same as neutral, market weight, sector perform etc. Essentially the analyst thinks the stocks will perform inline with the market

BUY is the same as outperform, overweight, add etc. The analyst thinks the stock will do better than the market

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