Investment Recommendation Definitions
Liberum provides investment recommendations in different publications and the definitions of these are outlined below. These reflect the author’s assessment of a stock's potential return.
November 2024
Research Notes
There are three recommendations:
- BUY stocks are expected to have a total shareholder return of at least 10%.
- HOLD stocks are expected to have a total shareholder return of between 0-10%.
- SELL stocks are those which could deliver a negative total shareholder return.
The time horizon for which the recommendation is deemed valid is three to six months unless otherwise specified in the particular research.
Commentary Notes
There are three recommendations:
- BUY stocks are expected to have a positive total shareholder return.
- HOLD stocks are those which could deliver a total shareholder return of between -10% and +20%.
- SELL stocks are those which are expected to deliver a negative total shareholder return of more than -10%.
The time horizon for which the recommendation is deemed valid is three to six months unless otherwise specified in the particular research.
LiberumSAM
The LiberumSAM systematic approach ranks stocks against their revisions momentum, shareholder value and valuation. The rankings are relative to a defined population (Europe, United States etc.). Each stock is assigned a decile figure showing its position within each ranking. The decile scores are combined to give an overall summary ranking for each stock.
- Overall summary ranking between 6.7 and 10.0: these stocks are ranked higher overall. We anticipate better relative performance from this group, other than those which have poor or failing revisions momentum.
- Overall summary ranking between 3.4 and 6.6: these stocks are ranked neutral overall. We anticipate neutral market relative performance from this group, other than those which have improving or failing revisions momentum.
- Overall summary ranking between 3.3 and 0.0: these stocks are ranked lower overall. We anticipate poorer relative performance from this group, other than those which have good or improving revisions momentum.
Relative performance is not anticipated within any particular timescale but, rather, depends on changes in overall score and especially that for revisions momentum. A full explanation of the methodology and of the definition and purpose of each measure is available on request.
