Broker Upgrades = Use by dates and Red 5

Hi Michael,

Thanks for your support over the past 3-years, so glad you enjoy the service and it’s been a help to you.

Analyst recommendations can be used in many different ways. Shares will often move significantly on the day of a change in a call on the stock by a broker as the institutional desks get to work marketing the research piece though trying to profit on these moves is difficult given the changes aren’t known ahead of time. The level of influence is also dictated by how good the analyst is. We do have access to analyst ratings, so each analyst gets rated on each stock they cover, the higher rated analyst therefore holds more weight and so on.

We often use ratings as a gauge of market positioning, i.e. if the majority of brokers have a ‘buy’ on a stock it is often an indication that the market is overweight which may mean gains are harder to come by. Price targets from analysts are set as 12 month targets.

As for Red 5 (RED), the gold producer has more than doubled since February last year, aiming to see production at ~200koz this year at a cost of ~$A2,000/oz. There has already been some interest from some of the larger gold names, Silver Lake Resources (SLR) have an ~11% stake in the business already. There has been a flurry of deals in the gold sector, a trend set to continue near term with some cashed up buyers in the market, so in short, yes, we think Red 5 is a potential target.