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Strong Sell (Analyst Recommendation)

Moneyzine Editor
Author: 
Moneyzine Editor
1 mins
September 21st, 2023
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Definition

The term strong sell is used to identify the stocks a sell-side analyst believes will significantly underperform relative to the overall market in the near term. A strong sell rating is a bearish recommendation, and is associated with a stock the analyst feels investors should not have in their portfolio.

Explanation

Sell-side analysts are responsible for generating periodic research reports for their clients. These reports highlight recent company news as well as projections of future earnings developed through the use of proprietary models. While these reports contain a lot of detail, they also contain a summary recommendation.

Analyst recommendations are not standardized, but they can be generalized. A strong sell rating is a signal to eliminate a stock from the investor's portfolio. These are the companies the analyst believes will significantly underperform relative to the market, industry and competitors. In addition to strong sell, similar recommendations include: Sell, Swap, Long-Term Avoid, and Significantly Underperform. The analyst is essentially telling the investor the company's stock can be expected to provide returns that are much lower than the stock market, or perhaps even negative returns to the investor, over the next twelve to twenty-four months.

Related Terms

accumulate, buy-side analyst, sell-side analyst, hold, underperform, strong buy

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