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We have put together a series of links designed to help users to compare and contrast a range of ratings and ranking of stocks.  Our focus is on ratings that are objective.  For this reason, we are not focusing on the broader universe of brokerage research.

Value Line

ValueLine is one of the best known sources for stock ratings.  ValueLine provides its ratings and a one-page summary report for all Dow 30 components.  These can provide some interesting contrasts to the Bellwether ratings.  The free Dow 30 reports are here

Value Line had $83M in revenue last year.  This is interesting because it appears that the company itself has a hard time generating revenue growth from its proprietary knowledge and tools.  This is, of course, all relative to value of the product. 

Morningstar

Morningstar is well known for its mutual fund ratings, but has expanded into providing ratings for individual stocks.  Morningstar.com is the primary web site.  Morningstar is private, but certain information is available . Morningstar generated $140M in revenue per year in 2003, selling information products to both retail and institutional investors.  One of the more intriguing features of Morningstar is that the 'star' ratings for which it is best known for mutual funds have no predictive value.  This has been shown in a number of studies and Morningstar makes no explicit claims that their ratings are predictive.  What Morningstar does provide is a series of nice descriptive tools, but these tools should not be interpreted as forward looking. 

Why is it that ValueLine sells $83M in products with a 35 year track record of providing advice and investment guidance with high value and Morningstar sells $140M in products with no evidence that their advice helps people to make more profitable investments? 

Riskgrades

Riskgrades is an interesting tool which provides a lot of free features.  Riskgrades is a product line developed by RiskMetrics, a pioneer of risk modeling and risk management in the United States.  The principal feature of Riskgrades.com is that it calculates risk levels associated with a given stock.  The risk calculation is considerably more sophisticated than Beta and much more responsive to current market conditions.  This can be a problem, of course.  Too see a riskgrade rating, visit this site.  The riskgrade is perhaps a bit too much a backward looking indicator for many applications.  In recent days (today is July 15), the price of INTC has tanked and the riskgrade has shot up--but it was quite low just before the large price decline.  If you spend a little time with riskgrades, you can easily see that the risk measure simply follows large price moves.  Riskgrades has some other related tools, such as a forecast of the likelihood of hitting a price target, but these products all appears to use purely trailing information so that the results are not really forward looking.

S&P STARS

S&P, while perhaps best known for their credit ratings, also have a longstanding stock rating approach called STARS.  The track record of STARS appears impressive, and the discussion about the approach and its track record is interesting .  There is limited information on how the analysis of past performance is conducted, which limits my enthusiasm somewhat.  While you must subscribe to S&P services to get the full set of ratings, you can obtain some top-rated stocks directly from the S&P website. 

 

 

 





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