As of January 2012, Investors Chronicle has moved to a simplified system of rating companies' shares that uses just three main terms: buy, sell and hold. However, we also use other recommendations for specific situations, and prior to 2012 there were five share ratings. The text below explains them all.
BUY - We think this is a quality company/fund and we think its shares/units are attractively priced relative to its potential.
SELL - We think that this is a poor-quality company/fund, and/or we think that its shares/units will underperform relative to the broader market, and/or we think that its shares/units are priced so highly that we cannot justify owning them.
Our share and fund tips also utilise a separate ratings system intended to give you an idea of the style (value, growth, speculative, income) and the risks and likely timescales involved. You can read more about this here.
HOLD - We think a company/fund is basically sound, but that at their current price its shares/units are not a compelling buy for new investors. However, if you already own the shares/units, there is no reason to cease owning them.
TAKE UP - This recommendation is specific to equity rights issues. It means that if you already own the shares, you should take up your rights to acquire more shares.
IGNORE - Applies to takeover bids and fundraisings. In the context of takeover bids, it means that you should take no action in relation to an offer or scheme of arrangement - either because there is a better price on offer elsewhere, or because an offer is unlikely to succeed.
AWAIT DOCUMENTS - You should wait to receive the documentation relating to a takeover bid.
SIT TIGHT - You should take no action just yet in relation to a takeover bid.
ACCEPT - You should accept a takeover bid; failure to do so may leave you holding shares in a company controlled by a single shareholder, or shares in an unquoted entity.
For more about how takeovers involving UK companies work, see our guide to the takeover process.
GOOD VALUE (used before Jan 2012) - the shares are expected to outperform the market.
FAIRLY PRICED (used before Jan 2012) - the shares are expected to perform in line with the market.
HIGH ENOUGH (used before Jan 2012) - the shares are expected to underperform the market.