DEFINITION of 'Channel Check'

A method of independent stock analysis whereby company information is supplied by third parties. Channel checks are most often conversations or personal research done by researchers or third-party information providers with direct managers of businesses within a certain sector or industry. Channel checks are thought of as getting the information "straight from the horse's mouth."

BREAKING DOWN 'Channel Check'

Many times, when stock analysts provide ratings for specific companies, the company being analyzed supplies the information that is used. When doing a channel check, the analyst is using information that is not supplied by the company because he or she is independently investigating the company's financial health.

Channel checks have come under scrutiny in recent years as regulators question whether such research should be considered inside information, or just personal research.

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