So, until recently I was employee #1 at TipRanks who was founded to answer the question "Are Analysts bullshitting us?" - https://www.tipranks.com
TipRanks has loads of great and interesting information - literally what _any_ analyst ranks on _any_ stock since 2009 - huge amounts of verified data from multiple objective sources.
> You could possibly beat the market by only buying stocks with sector outperforms or buy ratings and selling in one year.
This is true in theory (and very easily benchmarkable with TipRanks). If you follow the top 25 analysts you can beat the market pretty regularly (easily confirmed with a regression test).
You might be surprised, but you won't beat it by that much and your beta will be higher.
Also, Marketbeat has maybe 1/3rd of all the ratings and a study based on their data would be worthless anyway. Basing a study on their bought data would not be indicative of a whole market trend. The data source is simply not a reliable one.
In general - be very wary of recommendations - I've not found analyst opinions a good indicator of market performance over time (and I worked in a company that ranked analysts for 5 years). I have found however that combining that with several other signals (news sentiment, bloggers, insider opinions etc) can create strategies that outperform the market (TipRanks sells such strategies to big organizations).
I've sent my old employer an email to see if they can open some data regarding this - and reproducing the above study with real market data.
TipRanks has loads of great and interesting information - literally what _any_ analyst ranks on _any_ stock since 2009 - huge amounts of verified data from multiple objective sources.
> You could possibly beat the market by only buying stocks with sector outperforms or buy ratings and selling in one year.
This is true in theory (and very easily benchmarkable with TipRanks). If you follow the top 25 analysts you can beat the market pretty regularly (easily confirmed with a regression test).
You might be surprised, but you won't beat it by that much and your beta will be higher.
Also, Marketbeat has maybe 1/3rd of all the ratings and a study based on their data would be worthless anyway. Basing a study on their bought data would not be indicative of a whole market trend. The data source is simply not a reliable one.
The average analyst does not outperform the market (they lose), the average analyst says "buy" 85% of the time and are wrong most of the time about outperforms. The average analyst is pretty bad. Some analysts like Mark Mahaney https://www.tipranks.com/analysts/mark-mahaney or https://www.tipranks.com/analysts/jonathan-atkin?benchmark=n... are pretty decent.
In general - be very wary of recommendations - I've not found analyst opinions a good indicator of market performance over time (and I worked in a company that ranked analysts for 5 years). I have found however that combining that with several other signals (news sentiment, bloggers, insider opinions etc) can create strategies that outperform the market (TipRanks sells such strategies to big organizations).
I've sent my old employer an email to see if they can open some data regarding this - and reproducing the above study with real market data.