Moving Markets: Robert W. Baird

Here's one way to evaluate equity research: Measure the impact it has on stock prices. Bespoke Investment Group, a financial research firm, did just that, and apparently, Robert W. Baird takes top honors. Out of 16 firms, Baird's upgrades impacted stocks the most, driving prices up (on average) 3.09 percent in a single day. Merrill Lynch's research came in just a hair behind Baird's: Its analyst upgrades

Here's one way to evaluate equity research: Measure the impact it has on stock prices. Bespoke Investment Group, a financial research firm, did just that, and apparently, Robert W. Baird takes top honors. Out of 16 firms, Baird's upgrades impacted stocks the most, driving prices up (on average) 3.09 percent in a single day. Merrill Lynch's research came in just a hair behind Baird's: Its analyst upgrades caused an average one-day pop of 3.08 percent. Bespoke studied the impact of analyst upgrades and downgrades dating back to 2002, but filtered out rating changes that coincided with earnings reports, or covered stocks trading at less than $10 per share. Matrix Research came in last place — its upgrades caused price moves of 0.90 percent. As for downgrades, Merrill Lynch was the leader. The firm's analyst downgrades kicked stock prices down (on average) 4.95 percent in a single day.

WHOSE RATING CHANGES PACK THE MOST PUNCH

Bespoke counted the number of upgrades and downgrades each firm made between 2002 and September of 2007, and then measured the percent change in equities being covered by the firms over an entire day of trading.

Firm # of Upgrades Average % Change Entire Day # of Downgrades Average % Change Entire Day
Robert W. Baird 433 3.09% 442 -4.73%
Merrill Lynch 431 3.08 563 -4.95
Deutsche Securities 490 2.97 486 -3.66
Banc of America 547 2.90 565 -3.76
Lehman Brothers 527 2.87 469 -2.72
Bear Stearns 459 2.83 403 -4.15
JP Morgan 697 2.73 696 -3.73
Goldman Sachs 438 2.69 500 -2.95
Wachovia 383 2.64 481 -3.15
Credit Suisse 546 2.60 634 -3.85
UBS 867 2.55 941 -3.28
Morgan Stanley 490 2.46 540 -2.72
Prudential 481 2.40 482 -3.20
Citigroup 666 2.38 734 -4.04
A.G. Edwards 370 2.29 488 -2.91
Matrix Research 508 0.90 455 -0.96
Source: Bespoke Investment Group, LLC.
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