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Be Wary Of Analysts "Buy" Recommendations
Few Wall Street analysts officially issue "sell" recommendations. According to analyst recommendations tracked by Thomson Financial/IBES, only 2.1% of all recommendations were classified as "sell" or "underperform".
By comparison, a lofty 31.2% of all recommendations were "strong buy" and another 39.9% were "buys".
The remainder, about 27%, are "holds" or "neutrals" - viewed as a politically correct way for an analyst, whose brokerage firm has an investment banking relationship with the issuer, to signal a sell recommendation.
Though the data reflects recommendations as of mid-December, the percentages have been fairly typical in recent years.
Source: Wall Street Journal, January 2, 2001
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