Find answers to frequently asked questions about our service
What is TipRanks?
Simply put, TipRanks gives you all the information you need to know who to trust and make educated investment decisions. TipRanks is a financial accountability engine that uses machine learning and Natural Language Processing algorithms to measure the performance of anyone giving investment advice online. TipRanks allows you to see the track record and measured performance of any stock analyst, blogger, hedge fund, or corporate insider dating back to January, 2009
How is TipRanks Star Ranking calculated?
Our ranking system was developed alongside the Cornell Finance Department and incorporates all ratings made since January, 2009. Our star ranking calculation combines both of the Success Rate and Average Return of each financial expert; however the success rate is secondary to the ability of the analyst to generate positive returns. This combination then uses the Z Test to incorporate the significance of the amount of data in order to determine what is statistically more difficult to achieve.
What makes a Top Analyst?
Top Analysts are those who fall in the top 20% to top 30% of all analysts, outperforming the remaining 70% to 80% of analysts. Analysts are measured using the TipRanks Star Ranking™, which combines both the Success Rate and Average Return of every expert. When viewing the Analyst Consensus Rating on the stock, Premium users have the option to view both the Best Analyst Consensus and the Top Analyst Consensus.
How are analysts’ ratings measured?
An analyst’s success rate and average return per stock is calculated by measuring all Buy and Sell ratings on that stock. Hold ratings close any open Buy or Sell positions. Likewise, a downgrade to Sell will close the previous Buy rating, and vice versa. When an analyst issues a Hold rating, we treat it as though the analyst effectively closed any open positions he/she had on the stock. On our default settings, Buy ratings are measured for one year unless the analyst downgrades to a Hold within those 12 months. In this case, the Hold rating is only used to close the Buy rating before the one year mark. Profit is not measured after a Hold rating is made. When an analyst issues a Sell rating, we effectively close any open Buy positions the analyst had on the stock and in turn open a short position on the stock.
How is the Analyst Consensus Rating calculated?
The Analyst Consensus is at the top of each stock page. The consensus is calculated with a 3-point system that incorporates the analyst ratings made over the last 3 months where:
Buy = 1
Hold = 3
Sell = 5
The score of every rating made in the last 3 months is calculated to provide one of 5 consensuses:
Strong Buy: less than or equal to 1.5
Moderate Buy: more than 1.5, but less than or equal to 2.5
Hold: more than 2.5, but less than or equal to 3.5
Moderate Sell: more than 3.5, but less than or equal to 4.5
Strong Sell: more than 4.5
A stock can have a Strong Buy/Strong Sell consensus only if it received 3 or more ratings in the last 3 months. If a stock has only 1 or 2 ratings from the last 3 months and is a Strong Buy/Strong Sell, it will be normalized to Moderate Buy/Moderate Sell, respectively.
Premium users can also view the Top Analyst Consensus, which incorporates only ratings made by the best performing analysts.
What is a Corporate Insider?
Corporate Insiders are company executives, Board members, or 10% shareholders of the publicly traded companies. When Corporate Insiders buy or sell shares of their own companies, they are required to submit the transactions to the SEC within two working days.
What is the difference between Informative
transactions and uninformative transactions?
Uninformative transactions indicate that an Insider is buying/selling shares for reasons that do not necessarily indicate confidence in the company. Therefore, they do not hold much significance. For example, an Uninformative Buy in insider trading can be an insider who is given shares as a form of compensation. Likewise, Uninformative Sells are often Insiders who are exercising options that are about to expire, or cashing in shares that are given to them as a form of payment. Informative Buy/Sell transactions are deliberately made by Insiders, thus donning a vote of confidence in the company.
How often are hedge fund pages updated?
Hedge fund pages are updated on a quarterly basis as 13F forms are submitted to the SEC. Hedge funds must submit the 13F form to the SEC within 45 days after every quarter (most hedge funds wait until the end of this 45 day window). The hedge fund information on TipRanks updates automatically as the 13F forms are submitted to the SEC.
How are dividends incorporated into ratings
and share prices?
When a dividend is issued, the opening price of the stock is adjusted to reflect the payout. These adjustments are based on both the amount of the dividend and the closing price on the pay date.