Sentiment Analysis: Optimistic Coverage For Diageo

A Contextuall sentiment analysis on financial news headlines shows that the media has turned bullish on Diageo plc (DEO), but does this extreme optimism trigger a contrarian sell signal?

After all, would you want to buy into a company that is expected to exceed the media’s lofty expectations?

Importance on Extreme Investor Sentiment
Several behavioral finance studies have shown that investors tend to over-react to the most recent events. In other words, they overweight the the importance of recent information.

This means that investments may drop below fair value during periods of negative news, or rise above fair value during periods of positive news.

This is the goal of Contextuall: to identify examples where herd behavior has reached extreme levels.

We believe that, by identifying these areas of one-sided sentiment, investors could use these contrarian signals as a starting point for their own research.

Analyzing Media Sentiment for Diageo plc (DEO)
Based on an analysis of recent Diageo plc (DEO) news articles, about 41.89% of headlines have been classified as Positive, higher than the Beverage industry average of 30.18%.

4.05% of headlines have been classified as Negative (vs. an industry average of 13.19%).

Given the extreme bullishness in the media about the stock, should you be careful? With everyone pushing good news on the company, how much upside is left to price in?

Any comments on these sentiment trends? Let us know in the comment section.

Browse Sentiment Stats on Other Companies
The chart can be used to explore sentiment trends for other major companies, where each dot represents a clickable link to a company page.

Positive sentiment percentages are plotted on the vertical axis, while negative sentiment percentages are plotted on the horizontal axis.

In other words, companies in the top left have more optimistic sentiment than companies in the bottom right.