We Listened to Your Feedback
Over the last 2 years one feedback we kept hearing from many of our users was “why don’t you show news in your stock pages?”.
Our ultimate goal at TipRanks was to create a simple to use analytical tool for individual investors without becoming just another content news website – this created a real creativity challenge for us.
Earlier today we released a new version where every stock page also has a news tab with news from all over the web.
Correlation of News & Stocks
But wait… If you are a TipRanks user you probably already know that we don’t release standard features without putting our talented scientists to make the most out of them.
We know that there is a clear correlation between news and stock performance. A recent study by data scientists at the Fed revealed that positive news stories increase stock returns within a week, but negative news predicts low stock returns for up to three months.
One example: shares in psychiatric hospital chain Universal Health (NYSE: UHS) slumped 6.8% earlier this month after a Buzzfeed article raising grave concerns about patient treatment attracted political attention and a potential investigation.
Until now, however, finding the relevant news proved a challenge and assessing the overall news sentiment for specific stocks was even more difficult. Only a handful of well-established hedge funds could afford to license news sentiment analyzers.
That’s Where The New News-Page Comes In.
The news page is unique in that it gives hedge fund capabilities to individual investors. TipRanks’ algorithms comb the web for news about a particular stock. Any relevant news is logged and categorized. This data is converted into clear graphics so that users can see at a glance the overall news outlook for their stock.
Stock News Features
The new news-page will include several exciting features such as:
Bullish vs bearish news
The most recent news headlines are displayed in a scroll-down list with options to sort the news into bullish or bearish categories. By selecting ‘all news’ you can extend the list, pulling up all the recent news for that stock. Given that the we analyze the news with statistical algorithms this feature is “only” 90% accurate – way above the industry standard of 82%.
News sentiment score
The ratio of bullish to bearish news that the stock has accumulated over the past week is displayed on a graphic like the one below. You can immediately see where the sentiment for that stock falls on the range of bullish to bearish news, and how it compares to the average sentiment for that sector. This can be used in conjunction with the media buzz tool.
TipRanks scans the internet for any surges in news articles published about a particular stock. If the media density is notably higher than the weekly average it suggests that a significant event has occurred, for example an earnings report or a new model release, that could cause the stock price to surge or slump. The news sentiment score (see above) reveals the likely price direction.
This graph neatly demonstrates how good news impacts stocks, in this case with stocks divided according to market cap size. TipRanks tested the returns of 200 stocks with the highest buzz and sentiment score. Even when split by market-cap, findings show above market returns for small, mid and even large caps. Our initial findings show that the smaller stocks perform better on positive news than the large caps.
You can quickly discover the hot topics for that stock derived from last week’s articles with the most prevalent topics highlighted in bold.
To find the news page, select a stock and click the News button above the stock name. You can then flick between the Research page and the News page.
We are currently in the process of developing a stock screener based on news sentiment. In the meantime Smarter Analyst’s SmallCapRockets reveal what small cap stocks get exceptionally high positive news coverage.