AnaChart Shows How Sell-Side Stock Analysts Perform

Mark Hake

This is not financial advice and you should not rely on my analysis to buy or sell any stock. I am not undertaking to induce you to buy or sell any securities. I am relying on the “publisher’s exclusion” in the Investment Advisers Act of 1940 to provide this information without any personalized or individualized investment advice.

Have you ever watched a stock analyst on CNBC - how eloquent they can be on a stock? Yet they always seem to constantly change their recommendations on their stocks.

Moreover, look at their stock reports. These detailed tomes are hundreds of pages long. Yet they end up with these kinds of simple recommendations: "Buy", "Hold", "Under Perform", "Market Perform", and only rarely "Sell".

On top of that, for many stocks that have done well, there are often many analysts covering the stock on Wall Street.

The question arises of how well have these analysts done with their constantly changing recommendations.

In fact, who is really tracking how well these analysts' recommendations have performed? The value of these analysts' reports and recommendations is only as good as their past performance, especially since there are so many on each stock.

This is what AnaChart does. It's a new sell-side stock analyst tracking service and database.

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AnaChart.comPhoto byAnaChart

Let's take an example.

Palo Alto Networks Stock Has 41 Analysts Covering It - But Who is the Best?

Palo Alto Networks (PANW) is an $83 billion market cap stock that the Refinitiv database (which Yahoo! Finance uses) has 41 analysts covering the stock.

For example, Yahoo! Finance shows the following graph with all the recommendation trends from analysts and their distribution:

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PANW stock recommendation trendsPhoto byYahoo Finance

Moreover, Yahoo! Finance also lists the most recommendations from various analyst reports on PANW stock:

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YF - PANW stock - Upgrades and Downgrades from analystsPhoto byYahoo Finance

But this gives no one any assurance that any of these analysts have performed well with their recommendations for PANW stock.

That is where AnaChart's new sell-side analyst tracking service comes in handy for regular investors.

AnaChart's Stock Analyst Tracking

I recently described how well AnaChart tracks analysts on PANW stock in an article in the DataDrivenInvestor magazine, "Palo Alto Networks Stock Looks Very Cheap."

I also described AnaChart's stock analyst tracking in an article in Barchart, "Palo Alto Networks Delivers Huge 41% FCF Margins - PANW Stock Is Worth 52% More."

I point out in both of my articles that these stock analysts' price targets seem way too low.

In addition, in the DataDrivenInvestor article, I show how one analyst, using AnaChart's stock analyst tracking database, has done extremely well in his price targets for the stock.

For example, AnaChart, a new sell-side analyst tracking service, has a way of tracking this. There is even a YouTube video explaining how the service works.

This new site shows that the average upside of 37 analysts covering PANW stock is a 27.2% gain.

However, based on AnaChart’s performance scores of sell-side analysts, the best analyst on the stock took over 90 days for his price target to be reached.

For example, the best analyst covering PANW stock has been Raymond James analyst Adam Tindle:

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AnaChart review of top PANW stock analystsPhoto byAnaChart

Here is how AnaChart compares how well Adam Tindle's (Raymond James) price targets performed against the stock price over the past year:

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Raymond James analyst stock picking performance vs PANW stock pricePhoto byAnaChart

You can see that he has consistently picked higher price targets for the stock that have quickly been met.

That is why this analyst has the highest performance score of 6.24, as ranked by AnaChart. AnaChart has a YouTube video that shows how that performance score is calculated.

This shows how AnaChart ranks each analyst in terms of his or her stock price targets against the actual performance of the stock itself.

In other words, this is a unique way for self-directed investors to really track whether the advice from these analysts is worth following or not.

The bottom line is that analysts' ivory tower and eloquent reports can now be tracked against real-world stock price returns.

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Mark R. Hake, CFA, writes articles on national and local news, stocks, and market events at Kiplinger.com, Barchart.com, Medium.com, and Newsbreak.com as well as TalkMarkets.

He is also the Chief Strategy Officer for AnaChart, a new sell-side stock analyst tracking service.


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Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks and wealth, financial, and economic issues. He previously ran his own hedge fund and investment research firm and is presently Chief Strategy Officer for Foldstar Inc. and AnaChart.com.

Phoenix, AZ
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