How to Access a Coveted ‘Buy’ List at one of the Top Brokerages in the Country
Stock analysts have taken their fair share of criticism in recent years.
Some so-called experts are consistently off-the-mark and issue earnings projections that seem to be little more than guesstimates. Others simply follow the herd and are reluctant to raise or lower their outlook until a day or two after the company itself provides its latest bearing. Anyone can predict yesterday’s weather.
And then there’s the inherent conflict of interest that arises whenever an analyst covers a company that also happens to be a key investment banking customer. Brokerage firms seldom jeopardize those relationships by printing bearish comments, which is why you see far more “buys” than “sells”.
But some analysts are razor-sharp observers with impressive credentials and a granular understanding of the specific sectors they have been assigned. These analysts’ forecasts wield the power to move the market and send stocks soaring or crashing.
Many companies claim to have the most astute stock pickers, but in many respects Raymond James is a cut above the rest. The firm boasts a talented team of 90 senior analysts and research associates, which are in turn supported by economists, equity strategists and other experts.
Raymond James has racked up some impressive accolades. In fact, 19 different RJ analysts have taken home the prestigious Wall Street Journal “Best on the Street” award. Jim Parker, who covers the airline industry, has won seven first place trophies all by himself, for example. And last year, 12 of his colleagues were named to the Forbes “Blue Chip Analyst” survey for superior estimate accuracy and stock selection.
Such recognition is nice of course, but the numbers speak for themselves. Last year, Raymond James’ Best Picks list delivered an impressive average return of +54%, versus +33% for the S&P 500. That outperformance is nothing new — the firm has topped the market 13 of the past 14 years.
Typically, these recommendations are disseminated to the firm’s high net-worth clients. But you don’t need a million dollar account to have access to Raymond James’ all-star analysts. Thanks to the Claymore/Raymond James SB-1 Equity (NYSE: RYJ) exchange-traded fund (ETF) you can get the inside scoop and own a cherry-picked basket of the firm’s best ideas, for a reasonable charge of just 0.75%.
The fund tracks the Raymond James SB-1 Equity Index, an equal-weighted benchmark solely reserved for the select few stocks deemed “Strong Buy” according to the firm’s analysts. These standouts are expected to hit their price targets within six to 12 months.
The 120-stock portfolio spans the market-cap spectrum — roughly one-quarter is invested in large-caps like Home Depot (NYSE: HD) and Chevron (NYSE: CVX). From a sector standpoint, the bulk of the fund’s assets are sunk in technology, financial, energy and consumer discretionary stocks. These are the firm’s analytical sweet spots, so it’s not surprising to see the fund ante up in these areas.
Based on Raymond James’ exemplary track record, you can probably guess that shareholders have done well. And they have — RYJ has climbed more than +30% in the past 12 months, outrunning the S&P’s +18% gain. The fund has also outrun 99% of its peer group during the past three years.
Action to Take –> I view RYJ as a solid core domestic stock fund and will be watching it as a potential portfolio candidate for my premium newsletter, The ETF Authority .
The fund is a direct bet on the stock-picking ability of Raymond James’ seasoned analysts. That bet has paid off time and again during the past decade, and there’s no reason to think it won’t continue doing so. You don’t beat the S&P 13 out of 14 years by accident.