New Market Window

A bird’s-eye view of what the stockbroking industry is recommending to its clients offers a unique snapshot of the dynamics behind the sharemarket.

At the end of each month Rudi Filapek-Vandyck, the managing director of the news service FN Arena, prepares a report that captures how all the leading stocks are standing in terms of brokers’ recommendations. It’s a superb piece of competitive information for any private investor and from now on you can see the report here every month at Eureka Report.

Today we publish FN Arena’s bulletin for the period to May 31 and it’s very useful material indeed. For example, if you were wondering whether to choose BHP Billiton or Rio Tinto, it’s worth knowing that over the past year more brokers recommended BHP.

Better still, the Market Sentiment Indicator offers a ready-made analysis of how many of the market's leading stocks compare to previous forecasts.

One of the most compelling variables in the tables is the Implied Up score '” an estimate of how much higher in percentage terms the stock would need to rise for it to meet the average target price the broking industry has published.

Of course, with the sharp reversals on the ASX in recent weeks, the Implied Up column is showing some big figures as the gap between what brokers think a stock might reach and the level the same stock is trading at (after a market correction) widens considerably.

Looking across the tables anything with an Implied Up of 20% or more is significant. Among the leading stocks in the category are a swag of infrastructure listings that were struggling even before the correction hit.

Outside of the resources category, leading stocks such as News Corporation and Rinker also make an appearance. Take a look, it’s a new window to the market.