What does being a "rated analyst" mean exactly?
I know that being a rated analyst means that you got a lot of client votes as deemed by a ratings organization (such as II), but what's the exact rank requirement to be considered a rated analyst? Top 10 in votes for your sector and geography? Top 5? Top 3?
I thought they only have that in equity research
Yes. I'm asking in the context of ER.
If someone doesn’t specify a rank, then as far as I’m concerned it means they just made it on the list (received a vote).
It varies by sector and geography.
For example, you can be considered a ranked analyst in Basic Materials within the US. This means that you are either a Top 3 analyst or a runner up. It's been a while for me, but my understanding is that the runner up positions are determined by the number of votes for that sector and the degree of vote concentration within that sector. Thus if a given sector is super concentrated or just doesn't have a lot of votes for whatever reason, there can conceivably be no runner ups in that category. By comparison, there are some sectors that have up to two runner up spots, thus meaning a ranked analyst for that sector extends as far as Top 5. There may be sectors with more than two runner ups but I never encountered that within my coverage/experience - note this is for II, i'm less knowledgeable about the other systems.
As for the sector/geography split, that's usually based on major regions (i.e. US, EMEA, APAC, etc) and subsectors/mkt cap (e.g. pharma vs biotech; small cap biotech vs large cap biotech).
Thanks! So it really depends and can be anywhere from top 3 to top 5. When analysts claim that they are "II-rated" on Linkedin, it just means they're on the list right?
II ranks are determined by the voting process occurring now to the end of June. Votes are commission weighted. So the more trades you do and/or size of trades you do, the more your vote impacts the rank. To be a ranked analyst, you need to be top 3 in the II category in which you are competing. (Internet, software, semis, retail - hardlines, retail - softlines, etc).
The top 3 are automatically 'ranked' analysts. The actual scoring is based on some methodology that II developed using the commission weighted vote structure. Official 'runner-ups' are considered 'ranked' as well. In order to achieve runner-up status, your scoring must be within a certain percentage of the rank 3 analyst. (I think it was within 30% but not 100% sure on this). Geography doesn't matter except in the context of All-America or Europe ranks, etc.
Yeah, but I think what OP is referring to here is often times in an analyst’s bio or LinkedIn, etc they say “II rated” and so on. Now when one goes to check what rank they are in II, they turn out to be 6th or 8th or whatever. I’ve seen it several times. Hence my comment above that unless someone explicitly gives a ranking I don’t take it to mean much (if you’re top 3 you’re going to give the ranking).
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