Investment Recommendation Definitions
Panmure Liberum Research Notes
There are three recommendation types:
BUY stocks are expected to have a total shareholder return of at least +10%.
HOLD stocks are expected to have a total shareholder return of between -10% and +10%.
SELL stocks are expected to have a total shareholder return of -10% or less.
The time horizon for which the recommendation is deemed valid is 12 months unless otherwise specified in the particular research.
Panmure Liberum SAM
The Panmure Liberum SAM systematic approach ranks stocks against their Revisions Momentum, Combined Shareholder Value and Valuation Rankings. These rankings are relative to a defined population (Europe, United States etc.). Each stock is assigned a decile figure showing its position within each ranking. The decile scores are combined to give an overall Summary Ranking for each stock. Each stock is also assigned an Analysis Category based on these rankings.
The table below shows how the combination of these rankings and scores leads to a particular Analysis Category. The Analysis Categories then ultimately lead to either a Recommended Action and/or an Investment View. This is explained in the table below.
Analysis Categories | Summary Ranking | Revisions Momentum | Combined Shareholder Value / Valuation Rankings | Recommended Actions | Investment Views |
Most attractive | Score above 8 | Score above 5 and not falling significantly | Indicate opportunity | Buy i.e. continue to buy more or go overweight | N/A See ‘Recommended Actions’ |
Attractive | Score between 5 and 8 | Score above 5 and not falling significantly | Indicate opportunity | ||
Potential, improving | Score above 2.5 | Score of 5 or below, improving significantly | Indicate opportunity | No Action See left for an ‘Investment View’ | Alert + i.e. get interested, potential future buy |
Fair, deteriorating | Score above 5 | Score above 5, falling significantly | Indicate opportunity | Alert – i.e. get interested, potential future sell | |
Hold on | Score of 5 or below | Score above 5 and not falling significantly | Indicate risk | Hold i.e. take no action or do not sell | |
Hold off | Score above 5 | Score of 5 or below and not improving significantly | Indicate opportunity | Avoid i.e. take no action or do not buy | |
Poor, improving | Score above 5 | Score of 5 or below, improving significantly | Indicate risk | Alert + i.e. get interested, potential future buy | |
Risk, deteriorating | Score below 7.5 | Score above 5, falling significantly | Indicate risk | Alert – i.e. get interested, potential future sell | |
Unattractive | Score between 2 and 5 | Score below 5 and not improving significantly | Indicate risk | Sell i.e. continue to sell more or go short | N/A See ‘Recommended Actions’ |
Least attractive | Score of 2 and below | Score below 5 and not improving significantly | Indicate risk |
Relative performance is not anticipated within any particular timescale but, rather, depends on changes in overall ranking and especially that for revisions momentum. A full explanation of the methodology and of the definition and purpose of each measure is available on request.
Please note the ‘Distribution relative to market’ graph shows how stocks in a selected population are distributed into each of the Recommended Action and/or Investment View groupings in comparison to the current overall distribution within the region specified by a SAMnav user. Recommended Actions are Buy, Sell or No Action as defined in the table above. Where the stock has a No Action recommendation, an Investment View is given. These terms are also defined above. The regions available for a SAMnav user are Global, Europe, United States, North America, United Kingdom, Asia Pacific, Japan and Malaysia. Example: if 30% of a selected population falls into a Buy Recommended Action on the SAMnav matrix while 20% of the selected regional population falls into a Buy Recommended Action, the value shown in the distribution graph would be +50%.