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   What is a RevisionCluster?
 
   A RevisionCluster refers to a series of analyst estimate revisions within a relatively short period of time for a given fiscal period of a given stock.

Stocks typically have several individual analysts covering them and providing estimates, each revising his or her estimates independently. At any given time, a "current" estimate could have been made yesterday, or it could be as old as 100 days. Some investors rely on the "flash mean," which only includes estimates made in the past 30 days, to know if an estimate is out of date. Unfortunately, the flash mean is overly simplistic. On some slow-moving stocks, 60-day old estimates are perfectly valid. But when there's news, only estimates made after the announcement are relevant. If the news occurred a week ago, two-week-old estimates are obsolete.

StarMine's RevisionCluster analysis service uses proprietary algorithms to automatically detect when the number of recent analyst revisions meets a threshold of significance. Once a RevisionCluster has been detected in this manner, the SmartEstimate for the stock will systematically exclude all estimates made prior to the start of the RevisionCluster. In this manner, the RevisionCluster analysis service provides a much more dynamic means of determining the relevant estimates than the flash mean does.


See also:
What is a SmartEstimate?


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