Bespoke Investment Group has an interesting breakdown of analyst recommendations on stocks in the S&P 500 - specifically looking at which stocks are the most loved by analysts.
The breakdown goes like this. There are 10,151 analyst ratings for S&P 500 stocks. More than 53 per cent are "buy" recommendations, while just 5 per cent are "sells" (the rest are "holds").
Bespoke looked at which stocks have 80 per cent or more "buy" recommendations and compiled a most-loved list.
At the top, with 100 per cent of analysts giving the stock the thumbs-up, is a newspaper stock: Washington Post Co. However, there is just one analyst covering the stock, so it doesn't really count.
The second-place stock has a greater following: Celgene Corp. is followed by 25, and 96 per cent of them recommend it as a "buy." Also near the top: MasterCard Inc., Apple Inc., CMS Energy Corp., Thermo Fisher Scientific, Republic Services Inc., and Visa Inc.
For contrarian investors, of course, strong analyst approval is rarely good news. Indeed, it can be a sign that expectations for the stock are too high. We took a look at the top-performing stocks within the S&P 500 in 2010, and found that analysts' recommendations on the stocks were far more divided.
For example, Genzyme Corp., up 33 per cent this year, has "buy" recommendations from just 25 per cent of the 20 analysts following the stock. And Citrix Systems, up 30 per cent, has "buy" recommendations from 34 per cent of analysts.
That said, overwhelmingly negative views from analysts seem to coincide with poor performance. Sears Holdings Corp. - the worst performing stock on the S&P 500 this year, falling 35 per cent - has zero "buy" recommendations. Among the other top laggards, Nvidia Corp., Western Digital Corp., Eastman Kodak Co. and Pulte Group Inc. have also attracted little enthusiasm from analysts.
David Berman