Recently, BNY ConvergEx’s Jaywalk announced its winners for the first half of 2009 independent research provider performance award program. Jaywalk gave out awards in 5 different categories including Best Bullish Calls, Best Bearish Calls, Best Stock Selection, Best Calls from the Market Bottom (measured from March 2009), and Director’s Choice Award (acknowledges forward-thinking strategies).
The awards were calculated on metrics which focused on the degree to which each research provider’s equal-weighted portfolio of Buy/Positive ratings outperforms their equal-weighted portfolio of Sell/Negative ratings. These performance statistics were calculated by Abacus Analytics, a quantitative consulting firm serving the brokerage and investment management communities. Data from January 2009 through June 2009 was used in this analysis.
Awards were given to 2 providers in each of the categories, except for the Director’s Choice award in which TheStreet.com was the only winner. For the Bullish, Bearish, and Stock Selection categories, one award was given to providers who cover more than 1000 names and one award was given to a provider covering fewer than 1000 names.
Rapid Ratings International Inc. was lauded the most number of times, winning in three different categories (Bullish, Bearish and Market Bottom). The company uses a quantitative system to rate the financial health of corporations and financial institutions. Miller Tabak + Co., LLC was the only other firm to win multiple awards, winning in both Best Bullish Calls and Best Stock selection. The company’s analyst driven fundamental research covers a variety of sectors including Oilfield services, Financial Services and Healthcare.
Ativo Resarch, IPOfinancial.com, Boyars Alternative Viewpoint, and TheStreet.com also received one award each. The press release contains more information on the specific methodologies of each of these companies.
This data is taken from 6 months of performance, which is not a particularly long time, however the fact that the performance data was compiled and analyzed by an outside source (Abacus) lends it more credibility than a number of performance metrics obtained directly from providers where they are free to pick and choose exactly which timeframes to show. As with any performance evaluation, it is good to be aware that different market environments may lend themselves to certain methodologies and thus certain research providers may have a good six months but not necessarily outperform in the future. We have also heard from a couple of sources that Jaywalk’s research provider pool may be shrinking now that the settlement has ended, though this has not been confirmed with Jaywalk itself. Even so, John Meserve, the CEO of ConvergEx’s Jaywalk, highlighted the difficult environment that existed during the timeframe which these awards examined and rightly congratulates each of the firms on this list for doing so well in the face of the markets challenges.