Over the past several months, firms throughout the brokerage industry have begun to integrate social sentiment tools into their stock research offerings. As we mentioned recently, many of these tools continue to capture chatter that is either irrelevant to a company’s financial health or provided by unverified sources. In late January, E*TRADE integrated a tool into its stock research platform that works to combat this issue. Known as TipRanks, this third-party service ranks bloggers, analysts and corporate insiders based on their investment recommendations. Ultimately, TipRanks makes up for what other social sentiment tools lack: the important element of analyst accountability.
TipRanks was founded in 2012 to protect individual investors from underperforming financial experts. The tool offers detailed looks at individual financial analysts and bloggers, providing a proprietary five-star rating system for each pundit based on the quality, success and yield of prior tips. All authenticated E*TRADE clients have access to TipRanks on the site’s US Markets Page. From there, clients can review recently made recommendations, access articles and review pop-out analyst profile boxes containing the analyst’s average return and success rate. On the company Snapshot pages, the TipRanks module covers the past 12 months and displays a meter indicating blogger sentiment for the individual stock and for its SPDR sector, along with a pie chart breakdown of the sources of sentiments. The Analyst Price Targets section on company Analyst Research pages offers price target data, an analyst consensus graph and a table with more details on individual analysts’ opinions.
E*TRADE TipRanks Module
Overall, the incredible volume of social media chatter has only made it more difficult for investors to decide whose advice they can actually trust. While investors cannot always be assured of the quality and relevance of information provided by social sentiment tools, TipRanks commendably cuts through the market noise to give investors much needed peace of mind. It will be interesting to see if more firms throughout the brokerage industry add this valuable tool to their stock research offerings in the future.