- Wall Street’s sell-side analysts publish piles of bullish and bearish recommendations every day.
- TipRanks, a website that tracks and ranks analyst recommendations, collected notes from thousands of analysts and found the 10 best stock pickers of 2018.
- TipRanks graded analysts by calculating their success rates and the average return of their calls.
Wall Street’s sell-side analysts publish piles of recommendations on which stocks to buy, sell, or hold. But not all of those calls turned out to be worth listening to.
TipRanks, a website that tracks and ranks analyst recommendations, published a list of stock pickers who had the most success last year.
To compile the list, TipRanks collected notes from over 5,000 analysts in 2018, calculated the ratio of calls that generated positive returns in the following quarter relative to all ratings that were given, and examined the average performance of their recommendations.
Here is TipRanks’ list of stock pickers, in ascending order of their calls’ average return rate.
Alex Arfaei, BMO Capital
Success Rate: 84%
Average Return: 6.9%
Noteworthy recommendation: Pfizer(PFE)
With Arfaei’s buy recommendation for Pfizer on June 25, 2018, he made a profit of 21.3% in three months. However, he subsequently downgraded Pfizer to hold in November.
Matthew O’Brien, Piper Jaffray
Success Rate: 68%
Average Return: 7.9%
On March 16, O’Brien upgraded Ohio-based Nuvectra from “hold” to “buy.” Shares of the medical-device neurostimulation company surged by an impressive 70.9% over the next three months. O’Brien has since reiterated his NVTR “buy” rating eight more times.
Michael Wiederhorn, Oppenheimer
Success Rate: 76%
Average Return: 9.9%
Wiederhorn’s“buy” recommendation of Amedisys, one of the largest hospice-care providers in the US, was his most profitable call last year. From May 9 until August 9, shares jumped 57.2%.
Richard Davis, Canaccord Genuity
Success Rate: 72%
Average Return: 10.3%
Davis maintained his “buy” rating on the cloud-communications platform on February 14. Twilio’s positioning is “much better than the ardent bears would lead you to believe,” he said at the time. The stock gained 70.9% in the three months after Davis’ call.
Brent Bracelin, KeyBanc
Success Rate: 74%
Average Return: 12%
Noteworthy recommendation: Alteryx(AYX)
Bracelin’s most profitable recommendation of 2018 (with a three-month profit of 77.6%) was for the data-software stock Alteryx on May 21. He upgraded the stock from “hold” to “buy,” citing “strong” Q1 results and a favourable risk/reward.
Bracelin still has a “buy” rating on Alteryx with a $US74 price target (8% upside potential). He believes revenue can quadruple to $US600M+ as AYX becomes integral for predictive analytics and AI modelling.
Rob Owens, KeyBanc
Success Rate: 79%
Average Return: 12.7%
Noteworthy recommendation: Okta(OKTA)
Owens reiterated his “buy” rating on the cybersecurity stock Okta on March 18. In the subsequent three months from his call, the stock climbed 42.5%. In his most recent “buy” call, he gave a price target of $US76 – 4% above shares were trading.
Richard Close, Canaccord Genuity
Success Rate: 69%
Average Return: 12.8%
Noteworthy recommendation: Catasys (CATS)
Close’s most-profitable call last year was initiating specialised health-manager Catasys with a “buy” rating on June 18. CATS combines big data, analytics, and AI technology with human interaction to help those with untreated behavioural conditions and chronic medical disease. Close made a 68.4% profit on his CATS recommendation in three months.
Steve Manaker, Compass Point
Success Rate: 90%
Average Return: 16.4%
Noteworthy recommendation:Innovative Industrial Properties (IIPR)
Shares in cannabis-REIT Innovative Industrial Properties soared 37.8% following Manaker’s“buy” recommendation on March 29. Manaker has a 100% success rate on IIPR and an average return of 76.4%. He reiterated his “buy” rating for the medical-cannabis real-estate stock again in October.
Doug Schenkel, Cowen & Co
Success Rate: 57%
Average Return: 24.4%
Noteworthy recommendation: Tandem Diabetes Care (TNDM)
Schenkel’s best call of 2018 was his “buy” rating for Tandem Diabetes. He made the call on March 28. In the next three months, shares of the insulin-pump manufacturer soared 370%.
Jeff Johnson, Robert W. Baird
Success Rate: 64%
Average Return: 36%
Noteworthy recommendation:Tandem Diabetes Care (TNDM)
Johnson’s recommendation on medical-device manufacturer Tandem Diabetes proved a success. Shares rose by a whopping 480% in the three months from his recommendation on March 23. In the last year, TNDM shares have spiked 1,464% to $US43.96.
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