When it comes to researching shares, many investors take note of what city analysts have to say. The trading recommendations of these professionals are used by everyone from institutional fund managers to individual private investors. The reason is that these analysts know about the stocks they cover more than just about anybody else.
For investors, these kinds of recommendations can be a useful consideration - especially when you listen to the consensus view of all the analysts that cover a stock.
Take Auto Trader (LON:AUTO) as an example. Shares in the company have risen by 1.86% over the past month and they are currently trading at 570.8p. But what do the analysts that cover the company think?
Based on the broker 'consensus', there could be reasons to believe that the positive recent trend will continue. In terms of trading recommendations, Auto Trader currently has:
5 Buy recommendations
12 Hold recommendations
0 Sell recommendations
This suggests that analysts are generally upbeat about the outlook.
While analyst forecasts can be a useful guide to what City 'experts' think about a stock's near term future, they can be unreliable. To get a better idea about the strengths and weaknesses of Auto Trader it's worth doing some investigation yourself. Indeed, we've identified some areas of concern with Auto Trader that you can find out about here.