# of analysts as a criterion

**jeep** Thu Mar 10, 2005 1:39 pm

# of analysts as a criterion
To sell their research reports, analysts track hot stocks. Since hot stocks are commonly over valued and sell at a premium, they are generally not good picks for value investment to start with.

On the flip side, can we use the # of analysts following a stock as one of the criteria for picking stocks? This would very convenient if a software is used to mine Yahoo finance. Both Graham and Lynch mentioned this: a low-key company tend to be a much better target than a company with a lot of publicity.

**blast_investor** Thu Mar 10, 2005 2:48 pm

I absoluely agree with Mr. Lynch or Mr. Graham on the importance of avoiding hot stocks.

You can try that with your own software. But the problem is that most small cap stocks would have very small number of analyst or none, so it is hard to use that as investment guideline.

Sometimes, a small cap stock is pretty expensive even if there are small number of analysts following.

I think this rule is very valid and it is subjective. It is very hard to put this criteria into numerical numbers with software data mining.