An analyst is a professional usually trained in finance who closely follows specific investments and makes buy/sell recommendations. The analyst is often employed by a broker or major investment house, but some are self-employed doing business as consulting services. Recommendations may be given to clients as a free service, used internally, or offered on a for fee or subscription basis.
Many analysts specialize in certain sectors and attempt to identify the best investment opportunities in those sectors.
Analysts are often criticized for issuing many buy recommendations, but sell recommendations are often muted or delayed.
Those who work for major companies are sometimes accused of recommending stocks of companies who are major customers of the company. Large fees can be paid to the same firms for arranging bond placements, IPOs, and other financing arrangements. A conflict of interest is said to sometimes cause analysts to recommend stocks they feel are likely to be poor performers. A Chinese wall is supposed to exist at these firms separating their retail brokerage activities from their investment banking operations. Increasingly brokers offer independently prepared stock reports to their customers to avoid potential for conflicts of interest.
Related Fool Articles
- [link link title]
- Bond placement
- Chinese wall
- Conflict of interest
- Consulting service
- Investment banking
- Investment house
- Retail brokerage
- Stock report
Recent Mentions on Fool.com
- Should You Follow Goldman Sachs Advice on Oil Stocks?
- Warren Buffett Buys More IBM: Should You Do the Same?
- Lions Gate Entertainment Corp. Reports Record TV Revenue
- Hewlett-Packard Company Earnings: A Solid Quarter as Separation Nears
- Facebook: A Prosocial or Antisocial Stock?
- 5 Things Cisco Systems, Inc's Management Wants You to Know