Impact Of Analysts Recommendations On Stock Prices
Download Impact Of Analysts Recommendations On Stock Prices full books in PDF, epub, and Kindle. Read online free Impact Of Analysts Recommendations On Stock Prices ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
| Author | : Yogesh Kumar Chauhan |
| Publisher | : |
| Total Pages | : |
| Release | : 2012 |
| Genre | : |
| ISBN | : |
The paper studies the impact of buy and sell recommendations issued by analysts on the stock prices of companies listed on the National Stock Exchange (NSE) of India. Event study methodology is used to compute the abnormal returns around the event window, which is taken as -10 to 10. The study finds that buy recommendations issued by analysts on public domains help the investors generate abnormal returns on the day of the recommendation. On the other hand, sell recommendations do not show significant negative abnormal returns.
| Author | : Muhammad Subayyal |
| Publisher | : |
| Total Pages | : 16 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
This study analyzes the impact of analysts' recommendations on stock prices in the Karachi Stock Exchange (KSE) using the Morning Shout, a report published daily by Khadim Ali Shah Bukhari Securities Ltd (KASB) which includes buy and sale recommendations about different stocks. Using event study methodology, a sample period of 2 years and 277 recommendations were analyzed. Market model is used to estimate abnormal returns for stocks around the recommendation dates. Results of the study indicate that analysts' recommendations do create positive abnormal returns for investors and these abnormal returns are the result of the information content. Results show that stocks earned on average 0.41% abnormal return on the day of publication of recommendations and continued to earn abnormal returns till the 10th day of publication of recommendations. Further analysis shows that there is a possibility of information leakage prior to the publication of recommendations, as these securities earned positive abnormal returns prior to the publication of Morning Shout.
| Author | : Michael Souček |
| Publisher | : |
| Total Pages | : |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
The purpose of this article is to examine the impact of analysts' recommendation downgrades, upgrades, and reiterations on German stock returns and as to whether prof- itable investment strategies could potentially be designed around these recommendations. The paper provides a unique detailed descriptive analysis of financial analysts' recommendations changes on German stock market over the last decade. First, we show that changes in recommendations yield significant positive (negative) abnormal gross returns for upgrades (downgrades), respectively. Reiterations, on the other hand, do not cause statistically significant stock market reactions. We show, that stock price reactions following recommendation revisions are strongest at the announcement day and last up to six months for upgrades and four month for downgrades. A bulk of market reactions, appears on the recommendation event date and shortly before so that investors must trade in a timely manner to profit from analyst recommendations. A one-day delayed reaction to the change in recommendations do not allow for significant abnormal returns for most of the recommendation shifts.
| Author | : Sundaresh Ramnath |
| Publisher | : Now Publishers Inc |
| Total Pages | : 125 |
| Release | : 2008 |
| Genre | : Business & Economics |
| ISBN | : 1601981627 |
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.
| Author | : Nadine Weber |
| Publisher | : LAP Lambert Academic Publishing |
| Total Pages | : 72 |
| Release | : 2011-03 |
| Genre | : |
| ISBN | : 9783844306927 |
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.
| Author | : Philipp M. Schlumpf |
| Publisher | : |
| Total Pages | : 40 |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
This paper empirically investigates the impact of both the first release of analysts' stock recommendations to a limited clientele and the subsequent dissemination of the same information in a major newspaper to a broader audience. For a sample of 1460 stock recommendations published in FuW, Switzerland's major financial newspaper, significant positive abnormal returns on the day of the original release of buy recommendations and on the day of publication in FuW are documented. Tests of the price pressure and information hypotheses reveal that analysts' recommendations contain some new information, which is quickly incorporated in the stock prices on the first release of this information. In contrast, the statistically significant announcement effects associated with the publication of already known information can be primarily ascribed to price pressure in the underlying securities.
| Author | : Nerissa C. Brown |
| Publisher | : |
| Total Pages | : |
| Release | : 2007 |
| Genre | : |
| ISBN | : |
This paper documents the tendency of mutual fund managers to follow analyst recommendation revisions when they trade stocks, and the impact of analyst revisioninduced mutual fund "herds" on stock prices. We find that mutual fund herds follow consensus revisions in analyst recommendations, controlling for common investment signals that affect both analyst revisions and mutual fund trading. Consensus upgrades result in herds of funds buying a stock, while consensus downgrades result in even bigger herds of funds selling. Our most important finding is that mutual fund herding impacts stock prices to a much larger degree during our sample period (1994 to 2003) than during prior-studied periods. Further, we find the first evidence that mutual funds appear to overreact when they herd in their trades - stocks heavily bought by herds tend to underperform their size, book-tomarket, and momentum cohorts during the following year, while stocks heavily sold outperform. These reversal patterns are even stronger when herds of mutual funds (especially funds with poor performance records) follow analyst recommendation revisions. An investment strategy that accounts for the direction of both analyst revisions and mutual fund herding generates a return (adjusted for size, book-to-market, and momentum) exceeding six percent during the following year. Our results remain robust when we condition fund herding on analyst earnings forecast revisions instead of recommendation revisions. Overall, our study finds that the interaction between sell-side analysts and mutual fund managers plays an important role in setting prices in equity markets.
| Author | : Wei Hao |
| Publisher | : |
| Total Pages | : |
| Release | : 2011 |
| Genre | : Stock exchanges |
| ISBN | : |
| Author | : Jennifer L. Juergens |
| Publisher | : |
| Total Pages | : 45 |
| Release | : 2000 |
| Genre | : |
| ISBN | : |
This paper explores the impact of analyst investment recommendations on intra-daily stock returns and volatility when those recommendations are conditioned on the release of public news. Using a sample of 3,679 recommendations of computer and computer-related firms, we investigate differences in the timing and price reaction of two types of information: analysts' recommendations and public news announcements. We determine that overnight news announcements are significantly linked to the contemporaneous analysts' recommendations. When we condition recommendations on the presence of public news, we find that there is a significant intra-daily price reaction, both in terms of returns and volatility, to analysts' recommendations. Lastly, we show that recommendations have weakly Granger causal relations with news announcements. Overall, we establish that analysts' recommendations have an immediate impact on the market when they are released both with and without public news. Hence, anyone who examines the impact of public news announcements on market prices should also account for comments made by analysts as well.
| Author | : Eurico J. Ferreira |
| Publisher | : |
| Total Pages | : |
| Release | : 2006 |
| Genre | : |
| ISBN | : |
A rich literature examines the effects of analysts' recommendations on stock prices, and literature is developing on the effect of Regulation Fair Disclosure on the information associated with corporate earnings forecasts and announcements. This study examines the effect of Reg FD on the information content of analysts' rating changes. Based on recommendations associated with a random sample of Samp;P 500 Index stocks, the major finding is that investors have been responding to analysts' recommendations in the same way since Reg FD as they did before implementation of Reg FD. In addition, the results suggest that Reg FD does not require that practitioners change the way they view the analyst recommendation process.
