News Score
How to Use TipRanks’ News Score in Your Investment Strategy
One of the most important things to do once you create your portfolio is to remain updated about the latest happenings of the companies whose stocks you hold. TipRanks’ News and Insights section helps you to do just that. What’s more, TipRanks calculates a News Score based on the news articles related to a stock. By placing the news element in an easy-to-read data format, TipRanks helps you to quickly gauge the sentiment surrounding the stock and use it to your advantage.
To navigate to this page, go to the stock page that you are studying. On the left panel bar, go to News & Insights. Along with the News Score, you will find the headlines of all the latest news on a stock from popular news publications. You can click on any news article to read it further. Additionally, TipRanks will tell you whether the sentiment on the news is Bullish/Neutral/Bearish by displaying a button near the headline for each news story.
The TipRanks News Score helps you to see how Bullish or Bearish a stock is based on its recent media coverage. This score is generated using a formula that combines Media Buzz and News Sentiment. The combined signal will be one of the following: Very Positive/Positive/Neutral/Negative/Very Negative.
Media Buzz – This measures the number of stock-related articles published during the current week as compared to an average week. If the number of articles in the current week is higher than the weekly average number, it trends toward a bullish sentiment, and the quantity of excess will decide the degree of bullishness (trending toward darker green). The opposite applies when the number of articles in the current week is lower than the weekly average, indicating bearishness. Media Buzz is shown in a simple chart, which includes the number of articles This Week vis-à-vis the Weekly Average on a trend line, with green showing bullishness and grey showing bearishness.
News Sentiment – This measures the percentage of Bullish/Bearish articles on the stock as compared to the sector average. News Sentiment is shown in a simple chart, which includes the number of bullish/bearish articles This Week vis-à-vis the Sector Average on a trend line, with green showing bullishness and pink showing bearishness.
News Score – The combined result of both the above factors is displayed as the News Score. The more positive the News Score, the better, as it means the stock is poised for an upward trajectory, and vice versa when the score is negative. Once you have gauged the News Score of the stock, you can browse the Bullish and Bearish news related to the stock right beside the chart. Scan through the news pieces and read through those that interest you. You will gain a clearer picture of why the media is bullish or bearish on a stock and form your investment decisions accordingly.
How to Understand the Difference between Media Buzz and News Sentiment
The TipRanks News Score includes two elements: Media Buzz and News Sentiment. The media buzz measures the number of stock-related articles published during the current week as compared to an average week. On the other hand, the News Sentiment measures the percentage of Bullish/Bearish articles about the stock as compared to the sector average. In short, the Media Buzz defines the quantity of news pieces, while the News Sentiment defines the quality of the news pieces, meaning what type of sentiment they express on the stock. Both sets of information are necessary to make accurate and timely investment decisions.
If a stock has been buzzing lately, and several media outlets are publishing articles on the stock, it usually means there is some important event relating to the stock. At the same time, it is also important to understand the nature of the media buzz, i.e., the news sentiment. Why are the publications reporting news on the stock? Is it because of some positive or negative development? It’s important to study both of these aspects to derive your buy/sell call on a stock. TipRanks presents both types of information to you in easy-to-understand graphs, smoothing out your investment journey.
How to Use the Media Coverage Analysis Graph in Your Investment Strategy
Now that you have understood the difference and importance of studying both the Media Buzz and News Sentiment of a stock, let us see what other news-related information TipRanks has to offer. The TipRanks Media Coverage Analysis Graph presents the historical news coverage of the stock for the last three months. You will find this graph below the News Score on the News & Insights Page of a stock.
The graph displays three important aspects: the Number of Articles published during the period, the related Price Movement, and the breakdown of Bullish/Neutral/Bearish Articles in the same time frame.
During certain periods such as the earnings season, there will be a higher number of articles on a stock, each covering the earnings expectations or results for the company. If you notice, the price movement will fluctuate more before earnings are released, as more investors take trading calls based on their research. The same holds true when a company announces a major restructuring or company-level event that may have a positive or negative impact on the stock.
From the historical trend of the news and the price movement, you can gauge how popular a stock is and how the stock prices may fluctuate in the future based on some events. As an investor, this information helps you to make appropriate trading calls on the stock and prepare for any future stock volatility.
