Stock Ratings Definition:

• Add: The stock’s total return is expected to exceed 10% over the next 12 months. 
• Hold: The stock’s total return is expected to be between 0% and positive 10% over the next 12 months. 
• Reduce: The stock’s total return is expected to fall below 0% or more over the next 12 months. 

The total expected return of a stock is defined as the sum of the:

1. percentage difference between the target price and the current price and 
2. the forward net dividend yields of the stock. 

Stock price targets have an investment horizon of 12 months.

Stock Ratings Definition:
Recommendations are based an Absolute Total Return* Rating system, defined as follows:

• STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) 
• BUY (>15% total return over the next 12 months for small caps, >10% for large caps) 
• HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) 
• FULLY VALUED (negative total return i.e. > -10% over the next 12 months) 
• SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) 

* Share price appreciation + dividends

OIR’s fundamental views and ratings (Buy, Hold, Sell) are medium-term calls within a 12-month investment horizon.

As a guide,

• BUY rating: indicates a total expected return in excess of 10% based on the current price; 
• HOLD rating indicates total expected returns within +10% and -5%; 
• SELL rating indicates total expected returns less than -5%. 

For companies with market capitalization of S$150m and below, OIR’s 

• BUY rating indicates a total expected return in excess of 30%; 
• HOLD rating indicates total expected returns within a +/-30% range; 
• SELL rating indicates total expected returns less than -30%.

Maybank Kim Eng Research uses the following rating system -

• BUY Return is expected to be above 10% in the next 12 months (excluding dividends) 
• HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends) 
• SELL Return is expected to be below -10% in the next 12 months (excluding dividends) 

Total Returns	Recommendation	Rating
> +20%	Buy	1
+5% to +20%	Accumulate	2
-5% to +5%	Neutral	3
-5% to -20%	Reduce	4
< -20%	Sell	5

Remarks: We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock's risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation.

RHB Guide to Investment Ratings -

• Buy: Share price may exceed 10% over the next 12 months
• Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain 
• Neutral: Share price may fall within the range of +/- 10% over the next 12 months
• Take Profit: Target price has been attained. Look to accumulate at lower levels
• Sell: Share price may fall by more than 10% over the next 12 months
• Not Rated: Stock is not within regular research coverage 

Tayrona Financial Research has a two tier rating system as follows:
Tier-1:

• Overweight
• Neutral
• Underweight

Tier-2:
Where appropriate, companies rated Overweight are further classified within a return and risk matrix on the scales of Low, Low-Average, Average, High-Average and High.
This return and risk matrix takes into account other factors such as the magnitude of the expected upside, any preconditions or risks that may accelerate or impede value discovery and stock liquidity. Hence, a company with an Overweight rating and a high return and high risk classification, may have high upside, but is also susceptible to high risk such as reliance on projects in gestation.

(formerly known as NRA Capital Research)