Why doesn’t Inderes disclose the ownership of the analyst who prepared the report in the company in question?
Wouldn’t it be good for transparency to publish such information? Even if an analyst strives for complete objectivity, they might subconsciously focus on and emphasize aspects that are positive for the company if they own its shares. Many people seem to be interested in this matter anyway, so in that sense, the information wouldn’t hurt.
It would also be interesting to see if an analyst buys a company that has received a good recommendation. If not, then why give it a “buy” recommendation? Of course, the matter is not so black and white, but it would be quite meaningful to consider.
When Jukka Oksaharju (Finnish investor and author) once published interesting analyses of companies on his Nordnet blog, he openly stated whether he or his close circle owned shares in the company in question. This was an interesting and good addition. (Nowadays, Oksaharju only advertises his own books, but that’s another matter :D)
No, in my opinion, the people at Inderes are quite willing and openly sharing/have shared their portfolios here and there, as stated in the text above, and that’s good!
It’s quite clear, in my opinion, that an analyst doesn’t need to explicitly state after every recommendation whether they own the company in question or not. I’m not of the opinion like Zuckerberg that people shouldn’t have privacy.
“Does the analyst buy a company that has received a good recommendation? If not, why give it a buy recommendation?” Well, a couple of reasons. The company’s fundamentals are not dependent on the analyst’s desire to buy. “Hmm, I can’t give a buy recommendation for this because I don’t have the desire to buy it myself right now.” Maybe the stock doesn’t fit the analyst’s strategy. Maybe the analyst is building up a cash position or saving for a new Ferrari. There are a million reasons.
There should only be reasons like money being in companies with higher expected returns, the analyst not believing in their own recommendation, or trading rules setting too many restrictions and little flexibility on top of them, because theory cannot be fully applied in practice.
Do you think a company’s insider ownership should be public? Why?
At the same time, they could then slap that information at the end of the reports.
It doesn’t take much privacy if an analyst states whether they own shares in the companies they follow. If they’re disclosed here and there, why can’t the information be put in a report/compiled somehow for clarity?
I recall that at Inderes, holdings over €50k must be disclosed in analyses, and analysts are no longer allowed to buy shares in a company if their holding exceeds €40k. So, ownership can only exceed €50k due to an increase in value. I don’t remember where I read this, but it was probably somewhere here on the Inderes website. One of the analysts will probably confirm or correct my statement.
I don’t recall seeing any disclosures of holdings over €50k in any reports I’ve read, so there aren’t many (any?) of them.
A rule like that infringes on privacy much more, as it requires disclosing one’s wealth through such a threshold condition. The easiest way would be to simply report, in a consolidated manner, if an analyst following a stock owns the company, as well as their purchases and sales.
I put this here, even though it has been shown elsewhere; this link contains information if an analyst owns €50,000 or more of a certain company. To my knowledge, if the stock happens to drop so that the ownership falls below €50,000, the information can be removed from the aforementioned list. So, if I’ve understood correctly, someone might not have sold their shares, even if they’ve disappeared from the list.
And here’s this too:
This provides information about Inderes’ transparency and analysts’ holdings.
