As you may know, Zack’s rating system, which they feel is a fairly accurate short-term indicator, is based largely on analysts raising or dropping estimates or targets (as I understand it). It’s a 1-5 scale where 1 is the top group and 5 is the bottom. The largest group is 3 and smallest are 1 and 5 (like a bell-shaped curve). Of the stocks in my portfolio here are the current ratings:
I used to think of Zack’s as a premium service until I started noticing Zack’s “news” generated by robots and Zack’s touting micro CAPs which made me wonder if these were paid for ads. I never paid any attention to their ratings or most any other rating service for that matter.
I briefly followed Zacks (before the paywall) and noticed they change ratings quite often. I often end up owning quite a few "5"s that are doing just fine, though I am significantly less concentrated than you and others here.
how often do you compare the ratings with your portfolio?
I briefly followed Zacks (before the paywall) and noticed they change ratings quite often. I often end up owning quite a few "5"s that are doing just fine, though I am significantly less concentrated than you and others here. How often do you compare the ratings with your portfolio?
They send it to me every day, and as you say, there are usually 1-3 changes per day (which is why I referred to it as “short term”). They’ve done a lot of studies showing that in bulk, 1’s do lots better than 5’s over time.
