Broker Recommendation ADD / BUY

[hcirnitteg24]

Can anyone explain a very basic question to me, it has me boggled and I have searched numerous sites for an answer to no avail, whats the difference between the ADD and BUY brokers recommendations, BUY is obviously to buy, but ADD ?

 

[ShaneMc]

Can anyone explain a very basic question to me, it has me boggled and I have searched numerous sites for an answer to no avail, whats the difference between the ADD and BUY brokers recommendations, BUY is obviously to buy, but ADD ?

Buy is a stronger recommendation than Add, it all depaends on the broker but i think buy means they expect it to grow by more than 15% this year and add means they expect it to grow by at least 5%. Thats my rough idea of what it means

 

[LDFerguson]

Buy is a stronger recommendation than buy, it all depaends on the broker but i think buy means they expect it to grow by more than 15% this year and add means they expect it to grow by at least 5%. Thats my rough idea of what it means

I think there's a typo in Shane's first line - I reckon it should read "Buy is a stronger recommendation than Add..."

 

[Sunny]

Also depends on the broker using the term. They usually explain it at the bottom of their research.

 

[demoivre]

When the NASDAQ 100 was over 5000 points around March 2000 there was hardly a sell note on any of the stocks, despite farcical valuations. Most of these stocks were covered by numerous brokers. Don't pay too much attention to broker recommendations imo.

 

[NorfBank]

From a broker friend:

For a buy rating on a stock the minimum expected upside is 10% in absolute terms over 12 months. For a hold rating the expected downside is below 10% in absolute terms, A reduce rating is applied when there is expected downside on the stock. Ratings are based on a 12 month view.
Add is not a term we use anymore.

It doesn't answer your query unfortunately but he said most brokers have stopped using add as it wasn't a definitive enough term.

 

[hcirnitteg24]

Thanks for the advice guys, NCB stockbrokers are still using the ADD term on their broker reports, confusing ...

 

[ibaraki]

Do not buy or sell stock on the recommendation of any broker - the only reason they make 'recommendations' is to increase activity and hopefully commissions (if you do business with them). Educate yourself regarding the workings of the market.

 

[woods]

I always assumed that Add meant that if you already own some then maybe you should get some more but if you do not have a position then stay away from them. This may be relevant if you want to bring down your average cost.