New York – Research performance measurement is as much an art as a science. Integrity Research looks at the performance data derived by Investars on a quarterly basis. The table below shows the firms that performed best by looking at the buy and sell recommendations of each firm and assessing the percentage returns in price that accumulated over a 3 year period. The returns are posted in Basis points per day and the top 18 firms are posted.
Integrity includes all coverage sizes in the same analysis, whereas Investars data is divided into three coverage categories-over 500 stocks, between 500 and 100 stocks and below 100 stocks. We have regressed the cross sectional data for returns against coverage and find that the R-Squared is tiny and the slope coefficient of the regression is statistically insignificant. Simply put, there is no statistical linear relationship between coverage and returns. Further the residuals appear to be random, indicating the relationship is not likely to be a non-linear one.
Where we do see a relationship is in the number of recommendations and the nature of those recommendations. For example, the top firm B. Riley & Co generated all of its returns 95.5% return in its sell portfolio. This becomes more incredible when one determines that the RP made only 4 short recommendations over the period. The next firm (Haugen Custom Financial Systems) made nearly 75% of its return from its sell portfolio, but issued 670 sell recommendations.
| Research Provider | Recommendations | ||
|
Overall |
Buys |
Sells |
|
| B Riley & Co |
93.52 |
-11.89 |
-105.41 |
| Haugen Custom Financial Systems, Inc |
28.55 |
7.61 |
-20.94 |
| Sandler O`Neill |
21.59 |
-17.17 |
-38.76 |
| Longbow |
19.76 |
-3.29 |
-23.05 |
| Ladenburg Thalmann & Co. Inc. |
18.4 |
-9.29 |
-27.69 |
| FutureAlpha.com – Russell 3000 stocks |
17.22 |
-4.66 |
-21.88 |
| GARP Research & Securities Co. |
15.02 |
-8.89 |
-23.91 |
| MDB Capital Group |
14.74 |
-12.69 |
-27.43 |
| Zacks Investment Research, Inc. |
13.78 |
-4.51 |
-18.29 |
| Ford Equity Research |
12.86 |
-4.76 |
-17.62 |
| Nollenberger Capital |
12.64 |
-13.91 |
-26.55 |
| Keefe Bruyette & Woods |
12.6 |
-15.97 |
-28.57 |
| Quidnunc Research |
12.49 |
12.49 |
N/A |
| Kevin Dann & Partners, LLC |
12.15 |
-2.75 |
-14.9 |
| Avondale Partners |
12 |
-10.47 |
-22.47 |
| Taglich Brothers |
11.86 |
-7.66 |
-19.52 |
| KeyBanc Capital Markets |
11.81 |
-6.91 |
-18.72 |
| Standard & Poor`s |
11.12 |
-6.9 |
-18.02 |
| Thomas Weisel |
11.04 |
-9.35 |
-20.39 |
| Brean Murray, Carret & Co. |
10.29 |
-10.84 |
-21.13 |
In fact, only two firms made positive returns on their buy recommendations over the year Haugen and Quidnunc Research. Of note, Quidnunc was able to post a 12.5 basis points per day return, despite not having any sell recommendations included in the calculation.