Australian Stock Market Research for Australian Stock Quotes
Australian Stock Market Research for Australian Stock Quotes
We often get asked what brokers mean when they use various stock quotes to describe whether investors should buy, sell, or hold a stock.
Below is a series of Australian stock quotes that will help when researching the stock market.
Buy: A strong recommendation to go long. Not as good as strong buy but still very positive.
Outperform: The term outperform is in reference to the overall market. Not quite as good as a buy or strong buy recommendation, outperform is still quite Bullish. In the opinion of the body putting out the advice, this stock should do better than the market; therefore a trader may wish to buy the stock, call options, warrants or trade CFDS but should monitor the trade closely.
Marketperform: The stock is likely to perform in line with the overall market.
Hold/Neutral: Middle of the road, fence-sitting opinion. This stock is unlikely to move in one direction or the other according to the institution delivering the assessment.
Underperform: The stock is likely to do worse than the market.
Sell: An opinion that this stock is not going up in the short term. The broker is advising anyone holding this stock to sell out as the price is likely to drop.
Overweight: Each stock within the ASX indices has a specific weighting based upon its market capitalisation (cap). This means that BHP with a market cap of well over $100 billion, will make up a bigger proportion of the ASX index than, say Challenger Financial (CGF) which has a market cap of $3.5 billion. If a broker recommends being overweight in a particular stock, this generally means to have a higher weighting of the stock in your portfolio than its market weight would typically suggest.
Marketweight: Following on from above, this type of recommendation suggests that investors hold the stock in question in the same weighting as suggested by its official market weight. It is generally expected to perform in-line with the broader market.
Underweight: Again, this order must be considered with the stocks respective market weight in mind. In this case, the broker is suggesting that the stock still be held, but at a lower weighting than suggested by its official market weight.
Upgrade: When a stock moves up the scale from one rating to another. If may be an upgrade from strong sell, to sell which is not necessarily great news but is at least a step in the right direction.
Downgrade: When a stock is moved down a peg in the ratings system.
If you thought this lesson was insightful and helped you understand something new about the share market as we’ve got nearly 600 more of them in our Learning Centre Archive in our Traders Report. The more Australian stock market research you do the better.
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