Despite Market Carnage, Boutique Mackie Research Had Top Q1 2020 Buy Recommendation Performance


The top performing equity research buy recommendations for the three-year period ending March 31, 2020 came from Toronto-based Mackie Research Capital Corporation, according to performance information collected by Investars, a research performance measurement and commission management systems provider.

Investars collected performance data on 118 research providers for the period from April 1, 2017 through March 31, 2020, on which we have based our analysis.  Investars calculates buy recommendation performance by tracking the buy recommendations as if an investor had invested equal amounts of cash into each stock in the research firm’s buy portfolio. A buy remains a buy until changed to a hold or a sell.

Top Performers

Mackie Research Capital Corporation, which employs five senior analysts following approximately 100 small- and mid-cap stocks, had the best 3 year buy performance. Mackie Research’s recommendations were accompanied by extremely high levels of volatility, with a 40% standard deviation which was nearly twice the volatility of the S&P 500 (which increased nearly 60% since year-end).  According to Investars, the firm had only ten buy recommendations and one sell during the 12 months ending March 31, 2020.

Equity Research Firms with Top Performing Buy Recommendations for the 3-year period ending March 31, 2020

FBN Securities, a NYC-based institutional broker mainly covering the technology and media sectors, had the second-best buy recommendation performance for the period. 

The top fifteen firms had better aggregate performance for their buy recommendations than the S&P’s 5.1% total return for the three years ending 3-31-20.  However, it is important to remember that the performance analysis does not include transaction costs.

Eleven of the top fifteen firms were investment banks.  Second-ranked FBN Securities, behave (#8), Atlantic Equities (#9) and Monness Crespi (#12) do not offer investment banking.

Market Performance

The S&P 500 caught the COVID-19 virus and the only question for the first quarter of 2020 was how deep the losses would be.  For the quarter, only 30 stocks in the S&P 500 saw gains while 475 were down, with 423 down at least 10%.  Including dividends, the index fell 19.6% for the quarter and the one-year return was -7%.  After years of low volatility, the market whipsawed on almost a daily basis.  Nearly half of the trading days in the first quarter saw at least a 1% move in the index (12 up and 18 down).  All 11 industry sectors declined, with information technology stocks down ‘only’ 12.2% followed by healthcare stocks, off 13%.  Consumer staples shares fell 13.4% while consumer discretionary was off 19.6%.  Financials were especially weak as rates plummeted, down nearly a third (-32.3%) while energy was the worst performer, losing over 50% (-51%).        


Of the top fifteen research providers during the period, London-based independent firm Atlantic Equities had the lowest volatility for its buy recommendations (24.1%), only slightly higher than that of the S&P 500 (23.3%).  Second-ranked FBN Securities had the lowest maximum drawdown, -34.2%, which was better than that of the S&P 500 (-39.2%).

Duration of Buy Recommendations

Monness Crespi, Hardt & Co. had the longest average duration for its buy recommendations, averaging 11½ months for its recommendations. William Blair had the second longest, just a few days short of 11½ months.  Quant firm behave had the shortest average length for its buy recommendations, at 2½ months.  Except for behave, the buy recommendations of all the top fifteen providers had average durations longer than the Investars average of 8.8 months.

The longer the holding period, the more likely the firm’s performance can be captured by investors following its recommendations. Also, longer holding periods represent lower trading costs.

Sell Recommendations

On average, sell recommendations for the top-performing investment banks represented 3% of their total buy and sell recommendations, whereas for the top-performing independents, sell recommendations represented 22% of the combined recommendations. For behave, sells represented 60% of its recommendations.

One Year Returns

Mackie Research had a extraordinary 32% 1-year return, while the 1-year returns for all the other the top-performing research firms lagged the S&P 500’s twelve-month returns.

Our Take

Over the three-year horizon, small-cap specialists still show strong returns relative to the larger-cap S&P 500 (albeit with generally higher volatility).  However, in the likely scenario of a recession, small-cap stocks will be more vulnerable, as evidenced in the generally weak 1-year performance.   


About Author

Sandy Bragg is a principal at Integrity Research Associates. He has over thirty years experience as an investment research professional. Prior to joining Integrity in 2006, he was an Executive Managing Director at Standard & Poors, managing S&P’s equity research business and fund information properties. Sandy has an MBA from New York University and BA from Williams College. Email:

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