Can someone explain what accumulate means in relation to
stock purchases. I ask because I think it means purchase
additional shares. In researching stocks I have come across
recommendations of accumulate - which to me assumes you
already own shares of said stock. Am I right?

Does an accumulate recommendation equate to a buy if you
dont already own the stock? or is it saying buy more if you
own it, otherwise dont.

P.S. investorwords.com didnt quite hit the spot on this one.

Francis --

As a former stockbroker let me answer your question. The
rating system doesn't make any assumptions about whether or
not you own shares. An 'Accumulate' rating is just a
favorable review of how an analyst thinks a stock will
perform.

Stock analysts generally have a scale of how well a stock
will perform over a given time period, which is usually a
year. The rating is just an indication as to how bullish
the analyst is in regards to the stock's future performance.
Often times there are different names for the same opinion,
but there are typically 5 levels in the rating system.

Strong Buy/Recommended List/5-star
Accumulate/Market Outperform/Buy/4-star
Neutral/Hold/Market Perform/3-star
Avoid/Reduce/2-star
Sell/1-star

Merrill Lynch adds a few more layers with a long-term out
perform vs. a market outperform etc., I think Prudential
only has 3 ratings now in an effort to simplify -
Buy/Hold/Sell.

Anyway, to answer your question, an "Accumulate" would mean
that an analyst likes the stock and thinks it will do well,
but they don't like it enough to rate it a higher, say a
strong buy for example. The "Accumulate" rating doesn't
imply that you already own shares or not, it simply is a
statement by an analyst that the stock is better than a
hold, and not as good as a strong buy.

Hope that helps, sorry to be so long-winded.

Chris
tedmetro@yahoo.com






BERTRAM FRANCIS wrote:
> Can someone explain what accumulate means in relation to
> stock purchases. I ask because I think it means purchase
> additional shares. In researching stocks I have come across
> recommendations of accumulate - which to me assumes you
> already own shares of said stock. Am I right?
>
> Does an accumulate recommendation equate to a buy if you
> dont already own the stock? or is it saying buy more if you
> own it, otherwise dont.
>
> P.S. investorwords.com didnt quite hit the spot on this one.