Argus Research — A Top Fundamental Research Firm

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In the June issue of Buyside Magazine, Integrity Research Associates evaluated and rated a group of  seventeen (17) independent research providers over the twelve-month period that ended March 31st.

For the purposes of measuring and comparing the accuracy of an independent research firm’s BUY, SELL, HOLD recommendations, Integrity Research Associates used Investars “Rate of Success System” (ROSS) Synthetic return measure.  This measure quantifies a firm’s average return per recommendation by creating hypothetical portfolios based on their stock ratings.

Using Investars’ performance data, Integrity Research Associates has constructed a Research Recommendation Accuracy (RRA) Ranking comprised of a variety of measures including firms’ 12-month and 24-month ROSS Synthetic returns, the percentage of industries ranked in the top quartile, and the percentage of a firm’s coverage universe that is ranked as a top three stock.  Based on this approach, t

he top ranked independent research firms according to Integrity Research are listed below:

Broad-Based Fundamental Research: Argus Research

Quantitative Research: Global Capital Institute

Niche Fundamental Research: American Technology Research

Specialty Research:  RDEX Research

Unfortunately, the magazine did not have enough room to print the analysis of each of these indie firms’ performance.  The following few postings will provide the associated rationale.

Broad Based Fundamental Research – Argus Research

One of the nation’s most well established independent research firms, Argus Research, was rated as Integrity’s best performing “Broad-Based Fundamental Research Provider” for the twelve months ending March 31st, 2004 with an RRA ranking of 3.50 out of 5.

This solid rating resulted from a strong 14.14% ROSS Synthetic average performance on all of its BUY, SELL, HOLD recommendations over the past 12 months and an equally good 14.30% showing over the past 24 months.

In addition, Argus posted a consistent performance during the past year with the firm’s calls ranking in the top quartile in 5 of the 10 industry groups it provided recommendations for.

Of the 363 mid and large cap stocks covered at some point during the past twelve months, Argus had 107 stocks (or 29.5% of its coverage universe) ranked as either 1st, 2nd or 3rd among the 125 research firms tracked by Investars.

Argus’ best performing recommendations over the past twelve months included such firms as Nortel Networks Corp. (NT) which recorded a ROSS Return of 148%, Toll Brothers Inc. (TOL) which rose 133%, and Sanmina-SCI Corporation (SANM) which improved 124%.

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