Equity Summary Score

Analyst Opinions

Equity Summary Score

There are many different analyst opinions available for stocks. How do you know which opinion to follow? One way is to review the historical recommendation performance of the independent research providers. Good news - our newest research enhancement does some of this work for you! The Equity Summary Score is a consolidated accuracy weighted indication of independent research firms' sentiment for a given stock. It is calculated by StarMine, an independent third-party, using a proprietary model based on the daily opinions of independent research firms.

Equity Summary Score

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What is it?
The Equity Summary Score provides a consolidated view of the ratings from a number of independent research providers on Fidelity.com. It uses the providers' relative, historical recommendation performance along with other factors to give you an aggregate, accuracy-weighted indication of the independent research firms' stock sentiment.
How It Works
The StarMine model underlying the Equity Summary Score has a few key components.
  • Normalize - Look at the research providers' buy and sell ratings distributions to understand which ratings are scarce and therefore may be more important.

    The distribution of ratings from each of the independent research firms are normalized to make them more comparable with each other. For example, some research providers may issue a large number of buy recommendations and few sell recommendations, or vice versa. StarMine adjusts for this by overweighting "scarce" ratings and underweighting "plentiful" ratings. By normalizing the distribution of ratings, the model can recognize the "scarcity value" of ratings that are infrequently given which adds additional information to the model.

  • Weight - Look at the 24 month relative firm/sector ratings accuracy and use that information to determine which firms' ratings have the most weight in the aggregated Equity Summary Score.
  • Calculate - The normalized analysts' recommendations and the accuracy weightings are combined to create a single score. For the largest 1,500 stocks by market capitalization, these scores are then forcibly ranked against all the other scores to create a standardized Equity Summary Score on a scale of 0.1 to 10.0 for the 1,500 stocks. This means that there will be a uniform distribution of scores provided by the model thereby assisting investors in evaluating the largest stocks [in terms of capitalization], which typically make up the majority of individual investors portfolios. Finally, smaller cap stocks are then slotted into this distribution without a force ranking, and may not exhibit the same balanced distribution.
Making It Work For You
There are many ways to use the Equity Summary Score. You can use it as a screening criterion, to help identify stocks you may want to include or exclude from further analysis, in conjunction with other criteria. You can also use it to monitor the consolidated opinion of the independent research firms that are following the stocks you are currently holding in your portfolio.