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First, you must understand what a Brokerage "Buy" recommendation is.
By regulation, a registered Rep may not "Solicit" a buy order for a
particular stock unless it is covered by their research department. All
orders are marked either unsolicited or solicited. If a broker solicits
a customer to buy a stock which does not have a favorable rating from
the research department, the customer can come back and do all kinds of
nasty things.
So, what happens is you get a hot popular stock, pressure is put on the
research department and "Viola", a buy recommendation!
The rule of thumb, and you hear the guys on CNBC talk about this all the
time, a stock gets the highest rating when it is on it's high and the
lowest sell rating when it is on it's low. That way you any analyst can
show you his list of recommendations (in hind sight) and look brilliant.
>
> >From time to time, CNBC will report on stocks that have been issued a
> buy rating from large brokerages such as Smith-Barney, Salomon, etc.
>
> Does CNBC has subsriptions to this information from various brokerages
> or is there a 'public list' for this?
The analyst released the information to the sales force, and it gets to
the public right after that. It's kind of a big joke, because like I
said, they drop the ratings after the stock has taken the big hit.
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