TEL AVIV, April 9 (Reuters) - Israel-based TipRanks has launched a free online platform aimed at individual investors which scores equity analysts based on their published recommendations.
The “financial accountability engine” collects any digitally published stock recommendation and ranks over 5,000 analysts by performance so that investors can see their success rate.
“We provide our users with the simple answer of whether that guy can be trusted or not,” Uri Gruenbaum, founder and chief executive of privately-owned TipRanks, told Reuters on Tuesday. “We know how to recognise anyone online who gives financial advice.”
The company, founded less than a year ago, has had 1,000 users in the last six weeks mainly in the United States testing the product.
Gruenbaum said that while institutional investors have access to analysts’ rankings on products provided by companies such as Bloomberg and Thomson Reuters, TipRanks is the only product geared to individual investors.
Analysts’ rankings on TipRanks are determined by two factors - the average return of each recommendation compared with the performance of the S&P 500 and the success rate.
The top 10 percent of analysts have an average 74 percent success rate and their average profit is 10.2 percent over the S&P 500, according to TipRanks. The bottom 10 percent have a success rate of 35.4 percent and an average profit of 9.7 percent below the S&P 500.
The top rated analyst on TipRanks is Craig Weiland of UBS, with a 100 percent success rate and an average return of 16 percent above the S&P 500.
TipRanks, which is focused on English speakers, is free but the company expects to add features and charge for premium services in the future. It also plans to start covering bloggers and reporters providing financial advice online. (Editing by Mark Potter)