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Sell-Side

How we pick the world’s top sell-side analysts

Raj Shah

31 Jul 2017

Winners of the Thomson Reuters Analyst Awards must display accuracy and precision in their work. Photographer: Ricardo Moraes
Winners of the Thomson Reuters Analyst Awards must display accuracy and precision in their work. Photographer: Ricardo Moraes

Recognized as the gold standard for objective measurement of sell-side analyst performance, what makes a winner in the Thomson Reuters Analyst Awards?

With MiFID II poised to bring significant disruption to the research ecosystem, our quantitative-based awards program is now more relevant than ever before.

Prepare for MiFID II with expert assistance from Thomson Reuters

The Thomson Reuters Analyst Awards set the standard by which excellence and performance are measured in the sell-side research industry, while also acting as a vital benchmarking tool for buy-side budgets.

Andrew Jones (Strategic Business advisor, Thomson Reuters) congratulates award winners, Nirbhay Morzaria and Jalpan Shah at our event in India.
Andrew Jones (Strategic Business advisor, Thomson Reuters) congratulates award winners, Nirbhay Morzaria and Jalpan Shah at our event in India.

Based on StarMine methodology, the winners are selected on:

  • the returns of their buy/sell recommendations relative to industry benchmarks
  • the accuracy of their estimates against the consensus view
  • the ability to successfully distinguish their top-performing stocks from their bottom-performing stocks (in other words, those who are not afraid to make a sell recommendation).

Find out more about the Thomson Reuters Analyst Awards

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The winners are those that sifted deep into their industries to distil more differentiated, research insights, as well as extracting outsized returns from their coverage.

Watch video — Thomson Reuters Analyst Awards – Roundtable 

No sitting on the fence

Interestingly, both stock picking and estimate accuracy are different competences.

They each require distinctive flair, and are typically associated with different types of analysts’ personalities, suggesting winners intersect across the prism of research.

Analysts sitting on the fence with neutral calls do not do well in the rankings. The hold rating really meant stay away, which suggested missed opportunities as they did little to help their clients.

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Analyst Awards summary by industry rankings data.

Buy-side benchmark

Under MiFID II, analysts will need to demonstrate the value of their substantive research and determine an appropriate price for it. These regulations will make the buy-side vigilant about the quality of the research it consumes.

Discover more about StarMine, a suite of proprietary alpha-generating analytics and models spanning sectors, regions, and markets

These coveted rankings — respected and valued by institutional investors — can help connect with the sell-side across the critical research axis. In addition, the awards will act as a proxy of assessing the quality of their research or differentiation.

The messages for 2017 money managers:

  • look to the smaller research houses when formulating investment strategies, as they do better in the country-based awards
  • call in the bigger brokers, with their wide-ranging waterfront coverage, in the larger region-based awards — such as Europe and Asia, as they consistently do well in the overall rankings.
Recent rankings from the Europe 2017 Analyst Awards
Recent rankings from the Europe 2017 Analyst Awards

As a result of MiFID II, sell-side research is going to get a whole lot more interesting from 2018 and beyond.

The Thomson Reuters Analyst Awards can provide leverage to the sell-side in promoting their credentials to the discerning buy-side.

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