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How Have Analysts Performed?

With nearly 88% "Buy" ratings, Apple is certainly loved by the large majority of analysts that cover the stock.  Even though the stock has had a rough couple of months, it's still up nicely year to date, so you could say the analysts have been right on Apple in 2012.  We decided to see how the analyst community has been doing collectively so far in 2012 based on their calls on all stocks in the S&P 500.  

To do this, we took the S&P 500 as it stood at the start of 2012 and broke it into deciles (tenths) based on the percentage of buy versus sell ratings for each stock in the index.  So the "best" decile contains the S&P 500 stocks that are most loved by analysts, while the "worst" decile contains the S&P 500 stocks that are least loved by analysts.  When then calculated the average year-to-date performance of the stocks in each decile to see how they have performed.

As shown below, the stocks in the "most loved" decile are up an average of 12.69% in 2012.  This is about inline with the average performance of all S&P 500 stocks year to date.  The stocks in the "least loved" decile are up an average of 16.34% in 2012, which is the best performance of any decile.  So the least loved stocks at the start of the year are outperforming the most loved stocks by 365 basis points.

Below is a list of the S&P 500 stocks that were least loved by analysts at the start of the year.  Some of the noteworthy names include Whirlpool (WHR), Gap (GPS), Sherwin-Williams (SHW), Sears Holdings (SHLD) and Netflix (NFLX), and they're all up more than 10% year to date.  Just four of the least loved stocks are down more than 10% year to date, and SUPERVALU (SVU) is down the most at 65.89%.

Later this month, Bespoke Investment Group will be releasing its 2013 market outlook piece -- the Bespoke Report.  This will be our 6th annual Bespoke Report since we opened our doors for business in 2007.  Over the last few years, the Bespoke Report has become a must-read publication on Wall Street as money managers, investors and traders prepare for the year ahead.  No asset class or investment trend goes uncovered.

To receive the 2013 Bespoke Report, all you have to do is sign up for one of our subscription services over at Bespoke Premium.  You don't want to miss out on this one!