While recommendations are concise and, from a beauty perspective, like the cherry on top of the analytical cake, they can be misleading on their own. I write this somewhat tongue-in-cheek, but the point itself is all the more serious: without knowing the analysis and justifications themselves, recommendations (and target prices) are meaningless.
I have worked at Inderes for 4.5 years now, and here is a string of different recommendations and descriptions I have encountered so far.
As one soon realizes when reading these, it is necessary to read the analysis or watch the video where the investment target is discussed to find out the “real” recommendation.
Note: these are only the recommendations I have observed so far; they are like alien planets in space, meaning more are constantly being discovered over time.
Buy
CONVICTION BUY = The analyst believes 150% in the company and the buying opportunity is genuinely excellent
Buy = Pretty good, read the analysis and consider if it suits your portfolio
Hazard-buy = The company is really risky, definitely not a “buy” for everyone
Trap-buy = The analyst tries to lure you into a poor (value) company with a buy recommendation for years
Add
Buy-add = Actually a buy recommendation, but the analyst is being cautious by saying “add”. In my experience, this is the best recommendation at Inderes!
Buy, but next quarter’s results will be bad - add = The analyst is playing games and expects the market to react poorly to the next quarter’s bad results, which is why they don’t go for a “buy”
Add more = Could actually add a little more
Loose add = A fairly common recommendation when the analyst could also be on the “reduce” side, but a small majority of factors favor a positive recommendation. Very close to a “hold” recommendation.
Hope-add = The company has previously been on a buy recommendation, but the story and numbers have not developed as expected. The analyst protects their Starmine points by moving to the “add” side and hopes that the previously envisioned success will still materialize.
HODL-add = Actually a hold recommendation, but Inderes doesn’t have one, so “add”
Reduce-add = Poor arguments for a positive recommendation, but the recommendation is still somehow “add”
Reduce
Add-reduce = Could actually add, but staff are not allowed to go against recommendations
Hold-reduce = Hold
Lighten-reduce = A good time to lighten up
Sell-reduce = Should actually sell everything, but the analyst avoids too radical a recommendation for fear of some positive surprise
Sell
Hold-sell = Actually just hold good companies in your portfolio
Lighten-sell = Time for a small lighten-up
DON’T TOUCH THIS -sell = The company is as hazardous as radioactive waste and the sell recommendation is a warning sign
Panic-sell = No time to waste, sell as soon as you can