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The Value Of Analyst Recommendations
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Book Synopsis The Value of Analyst Recommendations by : Wanyi Yang
Download or read book The Value of Analyst Recommendations written by Wanyi Yang and published by . This book was released on 2018 with total page 386 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis comprises three separate empirical studies which examine different aspects of analyst stock recommendations in international stock markets. The first study focuses on the information content of analyst recommendations at the country level. It shows that analyst recommendations aggregated at the country level predict international stock market returns. A trading strategy based on country-level recommendations yields an abnormal return of around 1% per month. Additional tests indicate that analyst recommendations aggregated at the country level provide useful information to predict future aggregate cash flows and associated market returns across different countries. The second study shifts the focus towards the standard deviation of analyst recommendations. In particular, it takes a closer look at Miller's theory (1977) and tests whether the relationship between differences of opinion and stock returns exists at the country level. This study shows that country level disagreement measured from single stock recommendation dispersion is negatively related to future realized market returns. This study also provides evidence that growth stocks show a higher level of overpricing compared to value stocks. The aggregate difference of opinion remains significantly negatively related to market returns after allowing time-varying risk exposure. However, countries with more binding short-sales constraints do not show lower future market returns. Finally, the third study takes a broader perspective and investigates whether the short-term value impact of analyst recommendations varies across countries, and whether these differences are related to countries' institutional environments. The results show that stock price reactions are systematically different across countries. In particular, stock prices react significantly stronger to recommendation announcements in countries with higher accounting standards, more effective security enforcement, better earnings quality, common law origins, and better protection of private property. However, the enforcement of insider trading laws does not significantly affect the value of recommendations at the country level. The results are robust after extending the event window to (-15, +15) and excluding confounding earnings announcements. Moreover, the institutional environment affects the value of recommendation revisions across countries as well.
Book Synopsis Value of Analyst Recommendations by : Narasimhan Jegadeesh
Download or read book Value of Analyst Recommendations written by Narasimhan Jegadeesh and published by . This book was released on 2009 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines analyst recommendations in the G7 countries and evaluates the value of these recommendations over the 1993 to 2002 period. We find that the proportion of sell and strong sell recommendations in all of the countries are less than the proportion of the buy and strong buy recommendations. The frequency of sell recommendations is the lowest in the U.S. We also find that stock prices react significantly to recommendation revisions on the day of recommendation and on the following day in all of these countries except Italy. We find the largest price reactions in the U.S., followed by Japan. We evaluate trading strategies that buy upgraded stocks and sell downgraded stocks. Here again, the trading strategies have the highest profits in the U.S., followed by Japan.
Book Synopsis The Value of Analyst Recommendations by :
Download or read book The Value of Analyst Recommendations written by and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Could Investors Obtain Returns Using Analysts' Recommendations? by : Germán López Espinosa
Download or read book Could Investors Obtain Returns Using Analysts' Recommendations? written by Germán López Espinosa and published by LAP Lambert Academic Publishing. This book was released on 2009-09 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the value of stock recommendations issued by financial analysts for the the period 1994-2003, using data from JCF Quant. In every month of the sample period, stocks are classified into three portfolios, and studied first by consensus recommendation level and then by changes of consensus level. Returns from the recommendation portfolios are estimated using different models in the context of the portfolio calendar-time methodology. The results obtained show that sell-side analysts are able to detect profitable investment opportunities. Investors may obtain significant positive risk-adjusted abnormal returns constructing a hedge portfolio, buying the best-recommended assets and simultaneously selling the worst consensus stocks. However, a portion of these returns could be attributed to their tendency to recommend the acquisition of big "value" stocks and the sale of small shares with negative price momentum. Finally, the value of an analyst's recommendations is independent of the level of information on the firm, expressed by company size or the number of analysts covering each firm.
Book Synopsis The Changing Impact of Analyst Recommendation Revisions Over Time by : Nadine Weber
Download or read book The Changing Impact of Analyst Recommendation Revisions Over Time written by Nadine Weber and published by LAP Lambert Academic Publishing. This book was released on 2011-03 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Efficient Markets Hypothesis beholds that all public information is incorporated in the stock price. Yet economists question to what extent this holds, and these discussions are, among other factors, fuelled by the existence of analyst recommendations. If all information is already incorporated in the stock price, what value can analysts add? A comprehensive study on the German market finds that, indeed, a tangible effect is measured after analysts voice their recommendations; this effect is especially powerful when an analyst changes his recommendation to his previous one. Moreover, this book is the first to research how analyst recommendations have changed over time, whether analysts have better forecasting power during bull or bear markets, and, most importantly, how can an investor profit from this knowledge? An advanced calendar-time strategy has been developed wherein an investor can earn significant abnormal returns by following a momentum strategy in the short-term while simultaneously abiding to a contrarian strategy in the long-term.
Book Synopsis The Value of Client Access to Analyst Recommendations by : T. Clifton Green
Download or read book The Value of Client Access to Analyst Recommendations written by T. Clifton Green and published by . This book was released on 2004 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Early access to stock recommendations provides brokerage firm clients with incremental investment value. After controlling for transaction costs, purchasing (selling) following upgrades (downgrades) results in average two-day returns of 1.02% (1.50%). Short-term profit opportunities persist for two hours following the pre-market release of new recommendations. A calendar-based strategy produces annualized returns of over 30% and the results are robust within sub-periods. Recommending firms' market makers shift their quotes accordingly, providing indirect evidence that clients make use of their short-term informational advantage.
Book Synopsis The Informational Value of Stock Analyst Recommendations for Long-Term Oriented Investors by : Thorben Wegner
Download or read book The Informational Value of Stock Analyst Recommendations for Long-Term Oriented Investors written by Thorben Wegner and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This Master's thesis documents an empirical study on the quality of equity investment research particularly for investors whose target stock holding periods exceed the short term. A data sample comprising stock recommendations on large-capitalization stocks from both Germany and Switzerland is utilized in connection with event study methodology to generate insights into the immediate price impact of recommendations as well as the stock price development in the twelve months after their respective release. The obtained results exhibit a rather short-lived positive price shock immediately following the dissemination of favorable recommendations and a persistent negative price drift induced by negative recommendations - also when controlling for analyst herding effects. In consequence, the results of this thesis suggests a lack of informational value in favorable analyst recommendations, while "Underperform" and "Sell" recommendations appear to be valuable investment guidance on average. Missing independence of equity research services in brokerage houses from investment banking clients is discussed as the main reason for the explored informational value asymmetry.
Book Synopsis The Value of Analysts' Recommendations and the Organization of Financial Research by : Carolina Salva
Download or read book The Value of Analysts' Recommendations and the Organization of Financial Research written by Carolina Salva and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Analyst Recommendations and Stock Price Bubbles by : Karthik Balakrishnan
Download or read book Analyst Recommendations and Stock Price Bubbles written by Karthik Balakrishnan and published by . This book was released on 2019 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper documents how analyst recommendations are related to periods of bubbles. We find a strong positive relation between the concentration in analyst buy recommendations and bubble continuation in two settings. First, we show a positive association between the concentration in buy recommendations and the tech bubble; the crash was associated with changes in buy recommendation concentration. Second, in an out-of-sample analysis of firms in multiple industries from 1994-2009, we show that analyst buy recommendation concentration predicts future return patterns that exhibit characteristics of a rational speculative bubble. While the evidence is not sufficient to conclude that analyst buy recommendations are the causal factor that perpetuates the mispricing, our findings suggest that, at a minimum, analysts do not act proactively to correct this form of mispricing in a timely manner.
Book Synopsis Should You Bet on Your Broker's Advice? A Study of Analyst Recommendations in India by : Rajesh Chakrabarti
Download or read book Should You Bet on Your Broker's Advice? A Study of Analyst Recommendations in India written by Rajesh Chakrabarti and published by . This book was released on 2010 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: Equity analysts serve an important function by bringing information about companies to the stock market. Equity analysis and reporting by brokerage firms has increased considerably in recent years in India. We examine over 2000 analyst recommendations to study the predictive value and market impact of stock analyst forecasts in India. We find that analysts tend to be optimistic in their predictions, recommending buys considerably more often than sells. Their recommendations do have investment value at least in the near term. Clear buy recommendations appear to be the most valuable. The recommendations also seem to have some impact on stock price.
Book Synopsis Financial Analysts' Forecasts and Stock Recommendations by : Sundaresh Ramnath
Download or read book Financial Analysts' Forecasts and Stock Recommendations written by Sundaresh Ramnath and published by Now Publishers Inc. This book was released on 2008 with total page 125 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial Analysts' Forecasts and Stock Recommendations reviews research related to the role of financial analysts in the allocation of resources in capital markets. The authors provide an organized look at the literature, with particular attention to important questions that remain open for further research. They focus research related to analysts' decision processes and the usefulness of their forecasts and stock recommendations. Some of the major surveys were published in the early 1990's and since then no less than 250 papers related to financial analysts have appeared in the nine major research journals that we used to launch our review of the literature. The research has evolved from descriptions of the statistical properties of analysts' forecasts to investigations of the incentives and decision processes that give rise to those properties. However, in spite of this broader focus, much of analysts' decision processes and the market's mechanism of drawing a useful consensus from the combination of individual analysts' decisions remain hidden in a black box. What do we know about the relevant valuation metrics and the mechanism by which analysts and investors translate forecasts into present equity values? What do we know about the heuristics relied upon by analysts and the market and the appropriateness of their use? Financial Analysts' Forecasts and Stock Recommendations examines these and other questions and concludes by highlighting area for future research.
Book Synopsis Are Stars' Opinions Worth More? The Relation Between Analyst Reputation and Recommendation Values by : Lily H. Fang
Download or read book Are Stars' Opinions Worth More? The Relation Between Analyst Reputation and Recommendation Values written by Lily H. Fang and published by . This book was released on 2010 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using 1994-2009 data, we examine the relation between analysts' star status and their recommendation values. For investors with private, advance access to analyst recommendations (e.g., institutions), trading on All-American (AA) analysts' buy and sell recommendations yields significantly better risk-adjusted returns than trading on non-AAs' recommendations. For investors without such access (e.g., individuals), only top-rank AAs make significantly more profitable buy recommendations than others. AAs outperform non-AAs both before and after they are elected, and the performance differential does not reverse. Reg-FD, Rule 2711, and the Global Settlement did not significantly erode the performance differential between AAs and non-AAs. Furthermore, election to top-AA ranks predicts performance in buy recommendations even among analysts with high ex-ante election probabilities. Collectively, these results suggest that skill differences among analysts exist and AA election reflects institutional investors' ability to evaluate and benefit from elected analysts' superior skills. Public investors' opportunity to profit from the stars' opinions exists, but is limited due to their timing disadvantage.
Book Synopsis Analysts, Industries, and Price Momentum by : Leslie Boni
Download or read book Analysts, Industries, and Price Momentum written by Leslie Boni and published by . This book was released on 2004 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: The information value of analysts' recommendations is particularly enhanced by taking an industry perspective. Three benefits emerge. First, we show that analyst recommendation changes provide signals that can be used to successfully rank future relative underperforming and outperforming stocks within industries. When this ranking is used to form industry-neutral portfolios, the return-to-risk ratio improves almost 100% relative to portfolios in which industry weighting is ignored. The value of analyst recommendation signals, examined with the industry perspective, is remarkably consistent through time. Industry-neutral portfolio Sharpe ratios are six times larger than those of typical price momentum strategies. Second, examining recommendation information by industry permits the disentanglement of the value added by analysts from the well-documented price momentum anomaly. Equal-industry-weighted recommendation portfolios have greatly reduced loadings on price momentum relative to un-weighted strategies. Third, the industry perspective permits an examination of the link between analyst recommendation information, aggregated at the industry level, and industry returns.Industry returns precede industry-aggregated analyst information in the next month, suggesting that analysts take strong cues from recent industry returns in revising their opinions on stocks they follow. Perhaps more interestingly, however, we do not find that industry-aggregated analyst recommendation information predicts future relative underperforming and outperforming industries in any meaningful, incremental way.
Book Synopsis Risk Profiling and Tolerance: Insights for the Private Wealth Manager by : Joachim Klement
Download or read book Risk Profiling and Tolerance: Insights for the Private Wealth Manager written by Joachim Klement and published by CFA Institute Research Foundation. This book was released on 2018-05-01 with total page 150 pages. Available in PDF, EPUB and Kindle. Book excerpt: If risk aversion and willingness to take on risk are driven by emotions and we as humans are bad at correctly identifying them, the finance profession has a serious challenge at hand—how to reliably identify the individual risk profile of a retail investor or high-net-worth individual. In this series of CFA Institute Research Foundation briefs, we have asked academics and practitioners to summarize the current state of knowledge about risk profiling in different key areas.
Book Synopsis The Impact of Analyst Recommendations on U.S. Stock Market by : Wei Hao
Download or read book The Impact of Analyst Recommendations on U.S. Stock Market written by Wei Hao and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Value of Analyst Recommendations by : 周漢文
Download or read book Value of Analyst Recommendations written by 周漢文 and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Assesing [sic] the Value of All-star Analysts' Stock Recommendations by : Stephen Daniel Aguilar
Download or read book Assesing [sic] the Value of All-star Analysts' Stock Recommendations written by Stephen Daniel Aguilar and published by . This book was released on 2007 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
![Download Assesing [sic] the Value of All-star Analysts' Stock Recommendations PDF Online Free](https://books.google.com/books/content/images/frontcover/ZMsDuAAACAAJ?fife=w200-h370)
