Dig deeper with RBC Direct Investing
Enhancing the information available to clients to help them make educated investing decisions is an ongoing goal of RBC Direct Investing. We’re excited to add S&P Equity Research reports to our library of resources. You can now access S&P research online and get the latest fund information from one of the best research firms in the world. Add this to the strategic mutual fund research available to you from RBC Dominion Securities, plus the many other online resources and a wealth of information is only a click away.
S&P Equity Research
The equity research division of Standard & Poor’s (S&P) is a widely recognized service that ranks over 1,500 U.S. and 300 non-U.S. stocks using its exclusive STARS (STock Appreciation Ranking System) ranking system¹. Since inception on December 31, 1986, the 5-STARS “Strong Buy” recommendations have outperformed the S&P 500 15 times, while underperforming only three times and tying once².
Getting the Most of the S&P Reports
These reports provide an abundance of information that can be very valuable when you are considering a specific stock. The following is a breakdown of just some of the sections in the report along with explanations to help you get the most from S&P. You’ll find the S&P STARS ranking, the share price and the 12-month target price. Using the example shown on the right (Apple Inc.) for illustration purposes only, you can see that this large-cap growth stock is ranked a “Strong Buy”. S&P’s target price of $119, above the current price of $84.75 at the time of publication³, gives you a sense of the potential return for this stock over the next 12-month period.
Investment Risk
Also included is the S&P’s risk assessment of the stock. S&P ranks stocks as low, medium, or high risk, relative to the other stocks in its ranked universe. This qualitative measure assesses the underlying company’s operational risk and ability to be a going concern.
Get the Latest News
The Highlights section provides you with an overview of factors that may potentially have an impact on the stock. The Investment Rationale/Risk section enables you to learn more about the analysts’ rationale for giving the stock its current ranking and gives you the opportunity to assess their rationale and decide if you agree with the analysts’ ranking.
S&P analysts provide a corporate summary, a discussion of the main segments of the company, a breakdown of revenues by geography and their thoughts on the competitive landscape, trends and outlook for the stock.
Putting the Stock Into Context
Directly below the Sub-Industry Outlook is a peer group comparison table, which analysts use to value stocks. This table also helps you understand industry valuations and how the analyst came to his or her ranking. Peer groups are not necessarily a list of direct competitors; however, they usually include stocks that are driven by similar underlying fundamentals and industry dynamics. Stocks in this list can also give you alternative investment ideas.
Industry Outlook
Academic research suggests that much of a stock’s performance can be attributed to factors influencing the industry that the stock belongs to. Incorporating an industry outlook into one’s decision reflects a top-down approach to investing — a sound methodology employed by many professional managers. The Sub-Industry Outlook section gives an overview of the sub-industry that the stock participates in. An economy as large and diverse as the U.S.’s has 10 sectors encompassing more than 50 industries, and a succinct review can provide valuable insight.
Research You Can Count On
The S&P research reports have all this and much more including detailed financial information, valuation ratios, growth rates, stock volatility, analyst consensus estimates and research, and a short history of S&P ranking announcements. Along with the information already available to you online, S&P will help you make confident, informed decisions about your portfolio.
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Make the right move and start enjoying the speed, security and reliability of RBC Direct Investing. |
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¹ STARS evaluates a stock's future total return potential versus the expected total return of the relevant benchmark. A 5-STARS ranking means “Strong Buy”, 4-STARS means “Buy”, 3-STARS means “Hold”, 2-STARS means “Sell” and 1-STARS means “Strong Sell”.
² Past performance is no guarantee of future results.
³ It is important to note that STARS rankings change as S&P processes news on the company and movement in the stock. The appendix of the report shows a short history of the S&P opinions on the stock to date.
4 Please note that the research list is currently restricted to third-party funds. As a result, RBC Funds are currently not eligible for inclusion on the list.
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