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TheStreet.com’s Analyst Rankings: How We Did It — and Why data-total target=_blank> TheStreet.com’s Analyst Rankings: How We Did It — and Why data-total href=www.thestreet.com/story/962281/1/ithestreetcomsi-analyst-rankings-how-we-did-it—and-why.html&text=TheStreet.com’s Analyst Rankings: How We Did It — and Why&via=TheStreet target=_blank>

TheStreet.com’s Analyst Rankings: How We Did It — and Why target=_blank> Reddit Email Print Reprint

Who needs another ranking of Wall Street analysts? Individual investors, that’s who. While several publications produce annual analyst rankings, to date none has captured the essential aspects of the analyst role that matter most to ordinary investors. None really tells you which analysts will help make you money.

So, at TheStreet.com we set out to create the new standard in analyst rankings. Our objective: to identify analysts who have the respect of key institutional investors and strong stock-picking skills. Ours is the first ranking methodology to combine both institutional voting as well as objective data on stock-picking performance in one overall rank.

The project was made possible by the generous cooperation of Wall Street research directors, individual analysts and institutional investors. They helped us create comprehensive nomination lists and vet our quantitative data. In the polling phase, the institutional investors produced a resounding voter turnout. For the quantitative analysis of stock-picking performance, we selected widely respected I/B/E/S International. the New York-based source of analyst estimates, research reports and other industry data. And our methodology was developed in consultation with Robert Whitelaw. associate professor of finance at New York University’s Stern School of Business .

The Landscape

The Institutional Investor ranking measures how well analysts are regarded among institutional investors, but traditionally has not looked at stock picking — a basic analytical function. Moreover, many analysts have learned to game the II poll. They swing into action right before the ballots go out, timing their reports and client visits to garner votes. Finally, the II ranking mails ballots to more than 700 institutions, even though only a much smaller number of managers is in regular contact with the analysts.