By Arie Goren
The U.S. stock market continues its remarkable rally that started in 2009.
The S&P 500 (INDEXSP:.INX) index, which includes 500 leading companies and captures approximately 80% coverage of available market capitalization, has gained 7.0% year to date (as for July 07, 2014). The one year gain of the index is at 21.19%, and the compound average annual gain of the S&P 500 index over the last three years is at 13.48% and 17.55% over the last five years.
Khrom Capital was up 32.5% gross and 24.5% net for the first quarter, outperforming the Russell 2000's 21.2% gain and the S&P 500's 6.2% increase. The fund has an annualized return of 21.6% gross and 16.5% net since inception. The total gross return since inception is 1,194%. Q1 2021 hedge fund letters, conferences and more Read More
Will the stock market continue this rally? Let’s find out if analysts and bloggers agree by analyzing their latest recommendations. Since we wanted to eliminate all biased opinions, we have taken into account only the latest recommendations from the top twenty-five analysts and bloggers according to TipRanks, a website that ranks experts (analysts and bloggers) according to their performance.
The table below presents the number of recommendations of the top analyst according to TipRanks. Please note: only ratings from the last two months were taken into account.
The average percentage of “buy” recommendations of 74.7% shows that top analysts are still bullish on the stock market. However, considering that analysts in general give much more Buy recommendations (averaging around 86.5%). As such, these results do not represent particular enthusiasm among the top analysts.
The table below presents the number of recommendations of the top bloggers according to TipRanks. As with the analyst statistics, these numbers only take the ratings from the last two months into account.
Top Analyst Examples:
Piper Jaffray’s five-star analyst Gene Munster, who has 75% success rate and one year average return per recommendation of 28%, offered in the last month a Buy rating on Yahoo! Inc. (NASDAQ:YHOO), Groupon Inc (NASDAQ:GRPN), Amazon.com, Inc. (NASDAQ:AMZN), eBay Inc (NASDAQ:EBAY) and Apple Inc. (NASDAQ:AAPL).
His last Sell recommendation was 13 months ago.
RBC Capital’s five-star analyst Mark Mahaney, who has 73% success rate and one year average return per recommendation of 29.4%, offered in the last month a Buy rating on Zulily Inc (NASDAQ:ZU) and Pandora Media Inc (NYSE:P), and a Hold rating on Trulia Inc (NYSE:TRLA), TrueCar Inc (NASDAQ:TRUE) and Zillow Inc (NASDAQ:Z). His last Sell recommendation was on Groupon Inc (NASDAQ:GRPN) two months ago.
The extremely high average Buy recommendation of 97.1% demonstrates that top bloggers are still very bullish on the stock market.
Top Blogger Examples:
GuruFocus’ five-star blogger Dividends4Life, who has 87% success rate and one year average return per recommendation of 11.8%, offered ten Buy ratings in the last week. Among them: BreitBurn Energy Partners L.P. (NASDAQ:BBEP), Duke Energy Corp (NYSE:DUK), Tallgrass Energy Partners LP (NYSE:TEP), Watsco Inc (NYSE:WSO) and Abbott Laboratories (NYSE:ABT). Dividends4Life did not give any Sell recommendation in the last year.
Seeking Alpha’s five-star blogger David Alton Clark, who has 75% success rate and one year average return per recommendation of 29.8%, in the last month, offered a Buy rating on Ford Motor Company (NYSE:F), Bank of America Corp (NYSE:BAC), Kinder Morgan Inc (NYSE:KMI) and General Electric Company (NYSE:GE). His last Sell recommendation was on Intel Corporation (NASDAQ:INTC) three months ago.
In conclusion, top analysts and, especially, top bloggers are still offering much more “Buy” recommendations than Hold or Sell rating. Therefore, relying on the accuracy of their previous calls, there is a good chance that the U.S. stock market can continue its rally, at least for the near future.