Terms like “Buy”, “Sell”, and “Hold” are synonymous with financial analysts’ reports, yet very few people have a clear understanding of what they are and the best way to use them for value generation in the stock market. The terms are usually the result of thorough investigations carried out by brokerage firms and analysts as they look to make it easy for investors to make informed decisions about investments. Analysts' ratings range from a simple buy, sell or hold to an equal-weight, overweight or outperform. Many brokerage firms rate a stock on a scale of one to five stars, with five being the highest rating. The ratings are assigned depending on the kind of earnings the company has reported or what it is expected to report as well as on valuations and stock price.
