Ajaib Helps Validate Market Analyst Recommendations
Traders and investors are often tempted to buy shares after seeing a ‘Buy’ or ‘Overweight’ recommendation from securities analysts. Yet such recommendations are projections based on valuation and fundamentals.
Analyst recommendations are usually based on valuations such as PBV and PER relative to historical averages, profit projections, and fundamental catalysts. All of these matter, but they are projective in nature and may take a long time to be reflected in the share price.
The risk is that a share may be undervalued on paper yet remain under pressure in the short term if market sentiment is negative or selling pressure from large investors has not subsided. A cheap valuation does not automatically mean the price will rise soon. For that reason, an analyst’s recommendation should be one input among many in share analysis, not a single decisive signal.
Why the Flow of Funds from Large Investors Matters as Confirmation
Non-retail investors such as institutions and foreign players usually conduct deeper research, so the movement of their funds reflects a more genuine conviction in the market. If a ‘Buy’ recommendation is accompanied by significant accumulation by large investors, the thesis begins to gain the market’s trust. Conversely, if it is not supported by a corresponding flow of funds, or if distribution is actually taking place, that could be a red flag. It does not necessarily mean the analyst is wrong, but rather a matter of timing and confirmation.
Recommendations for Undervalued Shares Amid Pressure on the Banking Sector
Throughout the first half of 2026, shares of major banks, including BMRI, came under sustained pressure due to the weakening rupiah and concerns over net interest margin (NIM) compression, even though a number of analysts maintained their Buy recommendations on the grounds that valuations had become cheap and earnings remained solid.
This is where the Smart Money Movement Screener feature on Ajaib proves useful. Investors monitoring BMRI’s share price can check whether the share appears on the Top Non-Retail/Foreign Accumulation list even as its price is under pressure.
If BMRI appears on the Top Accumulation list whilst its price is falling, that is further confirmation that large investors are beginning to believe the undervalued thesis and are taking advantage of discounted prices. If it is absent, or instead shows a distribution pattern in the History (M) column, selling pressure may not have subsided yet. Both scenarios are equally useful pieces of information before deciding whether to follow a recommendation or wait for momentum.
Validating Analysts’ Recommendations More Robustly with Ajaib
A ‘Buy’ rating from an analyst is a good starting point, but it is no guarantee that the price will move in line with the projection straight away. Always check whether the movement of large investors’ money supports the thesis, particularly for shares labelled undervalued that are still weighed down by short-term sentiment.
Ajaib Terminal combines the Smart Money Movement Screener, Broker Summary, and Broker Distribution in a single platform, available on both mobile and desktop. Open Ajaib and check the Smart Money Movement Screener before following the next analyst recommendation.