Good information Laura! thanks, bruce

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Were you ever curious about what is meant by a "Sell Side" Analyst?  Why are they different from a "Buy Side" Analyst?  It kind of sounds like one type recommends stocks to sell and the other recommends stocks to buy.

That is partially true, but not the complete story.  A "Sell Side" Analyst is an analyst who is working for a company that is trying to sell you something.  Many times this will be a brokerage firm, trying to earn commissions from you buying and selling stock.  These analysts are the ones who issue the Strong Buy, Buy, Sell etc. ratings you see reported.   Their success is ultimately determined by the amount of sales the firm they represent makes.

A "Buy Side" Analyst is really someone kind of like you. They might work for a mutual fund or investment fund, evaluating and making recommendations about what stocks the fund should purchase or sell.  Like you, a "Buy Side" analyst uses information provided by "Sell Side" analysts to help them make decisions.   The success of a "Buy Side" analyst is determined by the success of the fund who purchases or sells the stocks they recommend.  

Both types of Analysts will do similar types of investigations, but, as an investor, you have to realize that the "Sell Side" Analysts may have a slightly different agenda than you do and that the types of information they dispense may have biases which do not necessarily align with what you might consider most helpful. 

Take "Analysts Estimates" with a grain of salt.  Spend the time to get to know about the companies you invest in yourself.  Over time, that will help you learn which analysts truly provide you with the best insight for making decisions. 

Laurie Frederiksen
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