Morgan Keegan’s Equity Research department is pleased to announce that beginning August 2, 2010, the equity research investment rating system will be changed to reflect a 12-month time horizon and will initiate 12-month price targets for all rated stocks in our research universe. We believe that the new price targets will make it easier for our clients to better understand how our analysts value companies and the longer time horizon better meets the investment needs of our diverse client base.
Effective August 2, 2010, Morgan Keegan will no longer publish equity research using our old six-month performance system and by August 31, 2010 every rated stock in our Equity Research universe will have a price target.
Morgan Keegan’s New Equity Rating Definitions
Performance Ratings
O = Outperform (Expected to outperform the S & P 500* over the next 12 months).
M = Market Perform (Expected to perform in line with the S & P 500* over the next 12 months).
U = Underperform (Expected to underperform the S & P 500* over the next 12 months).
*REITs’ performance benchmark is total return relative to the NAREIT Equity Index.
Suitability Ratings
S = Speculative (Business or balance sheet risk materially above that of the average U.S. public company).
M = Market Risk (Business or balance sheet risk not materially different from the average U.S. public company).
C = Conservative (Business or balance sheet risk materially below that of the average U.S. public company).
For regulatory purposes, our ratings of Outperform, Market Perform and Underperform most closely correspond to Buy, Hold, and Sell, respectively.
Price Targets
Twelve-month price targets for securities under coverage may be based upon various valuation metrics including without limitation: price/earnings ratios, price/sales ratios, discounted cash flow (DCF), relative multiples, sum of the parts, etc. Price targets are as of the date of the report in which they appear, are subject to change, and imply no guarantee of performance.
Old Morgan Keegan Equity Rating Definitions (effective through Friday, July 30, 2010)
Performance Ratings
O = Outperform (Expected to outperform the S & P Index 500* over the next 6 months)
M = Market Perform (Expected to perform in line with the S & P 500* over the next 6 months)
U = Underperform (Expected to underperform the S & P 500* over the next 6 months)
*REITs’ performance benchmark is total return relative to the NAREIT Equity Index.
Suitability Ratings
S = Speculative (Business or balance sheet risk materially above that of the average U.S. public company)
M = Market Risk (Business or balance sheet risk not materially different from the average U.S. public company)
C = Conservative (Business or balance sheet risk materially below that of the average U.S. public company)
For regulatory purposes, our ratings of Outperform, Market Perform, and Underperform most closely correspond to Buy, Hold, and Sell, respectively.
Other Information
Research reports may contain a short-term trading idea which highlights near-term catalysts or events affecting the company, its competitors or the market that should have a short-term price effect on the company’s shares. Short-term trading ideas are not related to a stock’s performance rating, which focuses both on a longer-term return and attractiveness for investment relative to the relevant benchmark. Short-term trading ideas are different from performance ratings and, by their very nature, will be more positive or more negative than the performance rating.
Research reports are not intended to provide personal investment advice and do not take into account the specific investment objectives, financial situation, or particular needs of any specific person. No security or investment strategy can suit all investors. Investors should seek financial advice regarding the appropriateness of their investing in any security or implementing any investment strategy discussed in a report and should understand that any statement in a report regarding future prospects may not be realized.
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