I've been making a YouTube series on how to pick a stock, one step per video. It's called How to Invest and it's built around Terry Smith's "buy good companies, don't overpay, do nothing".
The earlier ones were about the business itself and the price. Episode 6 is about everyone else: analyst ratings and price targets, insider trades, big funds moving in and out, and how much weight each of those deserves.
Analysts tell you what they think, and saying it costs them nothing. Price targets come off worst. A target is a guess at what other people will pay for the shares in a year, not what the business will earn. In the example I use, the median analyst target and the share price rose by the same percentage over 18 months, and the target never got there first. Ratings aren't much better. Analysts almost never use the bottom of their own scale, so a middle rating isn't the neutral call it sounds like. The useful part is the revenue and earnings forecasts, once you've checked how many analysts are behind the number and how far apart they are.
Insiders are different because they have to file what they did with their own money. They sell for all sorts of reasons, from tax bills to divorces. They buy for one. Last quarter, insiders at 1055 US companies over $1 B only sold, and at 161 they only bought. So when a group of them buy at the same time, it's worth a look. It's not a reason to act.
AMD and GE HealthCare are the examples for this video.
[https://youtu.be/WGm3nVEYNYc](https://youtu.be/WGm3nVEYNYc)
Not investment advice. AI used in making the video.
