The Value Of Analysts Recommendations And The Organization Of Financial Research
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| 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 | : Thomas F. Lewis (Jr.) |
| Publisher | : |
| Total Pages | : 64 |
| Release | : 2017 |
| Genre | : Accounting |
| ISBN | : |
This study investigates the extent to which sell-side analysts make full use of available financial and nonfinancial information signals in formulating stock recommendations. Prior research shows that investors rely strongly on sell-side analysts' recommendations and that sell-side analysts pay considerable attention to nonfinancial measures in making their decisions. However, prior research has primarily focused on the mere presence of nonfinancial measures and not the extent to which the direction of such measures (i.e. favorability) is associated with firm value, or assessed the extent to which any interaction between financial measures and the direction of nonfinancial measures may influence analysts in formulating stock recommendations. Using a data set hand-collected from annual proxy statements, I use ordered logistic regression analysis to provide a multivariate test of the relation between sell-side analyst recommendations, financial and context-specific nonfinancial measures. I find that analysts do incorporate the direction (favorability) of nonfinancial measures in formulating stock recommendations and that unfavorable nonfinancial measures attenuate positive financial information.
| Author | : Sundaresh Ramnath |
| Publisher | : |
| Total Pages | : 117 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
This paper reviews research regarding the role of financial analysts in capital markets. The paper builds on the perspectives provided by Schipper (1991) and Brown (1993). We categorize papers published mainly since 1992 and selectively discuss aspects of these papers that address or suggest key research topics of ongoing interest in seven broad areas: analysts' decision processes, the determinants of analyst expertise and distributions of individual analysts' forecasts, the informativeness of analysts' research outputs, analyst and market efficiency with respect to information, effects of analysts' economic incentives on their research outputs, effects of the institutional and regulatory environment (including cross-country comparisons), and the limitations of databases and various research paradigms.
| Author | : Enrico Maria Cervellati |
| Publisher | : |
| Total Pages | : 27 |
| Release | : 2012 |
| Genre | : |
| ISBN | : |
Financial analysts' research activity seems to be important for investors in their investment decisions. Understanding if financial analysts' reports can influence the market and the degree of reliability of their forecasts has been a theme lively debated in the academic literature but also in the press, mainly because of recent financial scandals. The main objective of the paper is to calculate the investment value of financial analysts' recommendations on companies listed in the Italian Stock Exchange and to empirically verify the possibility of profiting from relying on the average consensus of recommendations. We have enclosed in the analysis all the 16,634 reports issued between the 1st January 1999 and the 23rd July 2004 and available on the website of the Italian Stock Exchange. We have classified companies by quarter, based on the average consensus by analysts, and we have formed five portfolios based on this consensus. Furthermore, we have calculated the excess returns of each portfolio in each quarter. Our results seem to suggest that analysts' rating have indeed investment value, even if investors should carefully consider neutral recommendations that in reality seem to be negative one. These results also give some interesting regulatory suggestions.
| Author | : James Valentine |
| Publisher | : McGraw Hill Professional |
| Total Pages | : 465 |
| Release | : 2011-01-07 |
| Genre | : Business & Economics |
| ISBN | : 0071736395 |
The first real-world guide for training equity research analysts—from a Morgan Stanley veteran Addresses the dearth of practical training materials for research analysts in the U.S. and globally Valentine managed a department of 70 analysts and 100 associates at Morgan Stanley and developed new programs for over 500 employees around the globe He will promote the book through his company's extensive outreach capabilities
| Author | : Jack Alexander |
| Publisher | : John Wiley & Sons |
| Total Pages | : 647 |
| Release | : 2018-06-13 |
| Genre | : Business & Economics |
| ISBN | : 1119491487 |
Critical insights for savvy financial analysts Financial Planning & Analysis and Performance Management is the essential desk reference for CFOs, FP&A professionals, investment banking professionals, and equity research analysts. With thought-provoking discussion and refreshing perspective, this book provides insightful reference for critical areas that directly impact an organization’s effectiveness. From budgeting and forecasting, analysis, and performance management, to financial communication, metrics, and benchmarking, these insights delve into the cornerstones of business and value drivers. Dashboards, graphs, and other visual aids illustrate complex concepts and provide reference at a glance, while the author’s experience as a CFO, educator, and general manager leads to comprehensive and practical analytical techniques for real world application. Financial analysts are under constant pressure to perform at higher and higher levels within the realm of this consistently challenging function. Though areas ripe for improvement abound, true resources are scarce—until now. This book provides real-world guidance for analysts ready to: Assess performance of FP&A function and develop improvement program Improve planning and forecasting with new and provocative thinking Step up your game with leading edge analytical tools and practical solutions Plan, analyze and improve critical business and value drivers Build analytical capability and effective presentation of financial information Effectively evaluate capital investments in uncertain times The most effective analysts are those who are constantly striving for improvement, always seeking new solutions, and forever in pursuit of enlightening resources with real, useful information. Packed with examples, practical solutions, models, and novel approaches, Financial Planning & Analysis and Performance Management is an invaluable addition to the analyst’s professional library. Access to a website with many of the tools introduced are included with the purchase of the book.
| Author | : Rajesh Chakrabarti |
| Publisher | : |
| Total Pages | : 22 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
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.
| Author | : BusinessNews Publishing, |
| Publisher | : Primento |
| Total Pages | : 29 |
| Release | : 2013-02-15 |
| Genre | : Business & Economics |
| ISBN | : 2806222591 |
The must-read summary of Mitch Zacks' book: "Ahead of the Market: The Zacks Method for Spotting Stocks Early – In Any Economy". This complete summary of the ideas from Mitch Zacks' book "Ahead of the Market" shows that many investors rely on annual analyst reports, which are designed to advise which stocks to buy/ sell or hold. However, despite the fact that over $1 billion a year is put towards these reports, this summary sides with many other investors in thinking that a lot of the content is corrupt and biased in favor of the companies that fund them. This guide suggests that rather than following one report; you should combine the research compiled by a larger sample of analysts. This will teach you to identify certain patterns in what the analysts say and how their views change over time. You will then be better informed and be able to develop a better method for making smart investments. To this end, this summary offers four key analyst investment strategies to follow. Added-value of this summary: • Save time • Understand the key concepts • Increase your business knowledge To learn more, read "Ahead of the Market" and discover how to spot winning stocks, and steer clear of untrustworthy analyst reports.
| Author | : Kent L. Womack |
| Publisher | : |
| Total Pages | : |
| Release | : 2000 |
| Genre | : |
| ISBN | : |
An analysis of new buy and sell recommendations of stocks by security analysts at major U.S. brokerage firms shows significant, systematic discrepancies between precommendation prices and eventual values. The initial return at the time of the recommendations is large, even though few recommendations coincide with new public news or provide previously unavailable facts. However, these initial price reactions are incomplete. For buy recommendations, the mean post-event drift is modest (+2.4%) and short-lived, but for sell recommendations, the drift is larger (-9.1%) and extends for six months. Analysts appear to have market timing and stock picking abilities.
| Author | : Thomas R. Robinson |
| Publisher | : John Wiley & Sons |
| Total Pages | : 1064 |
| Release | : 2015-01-30 |
| Genre | : Business & Economics |
| ISBN | : 1119029740 |
Better analysis for more accurate international financial valuation International Financial Statement Analysis provides the most up-to-date detail for the successful assessment of company performance and financial position regardless of country of origin. The seasoned experts at the CFA Institute offer readers a rich, clear reference, covering all aspects from financial reporting mechanics and standards to understanding income and balance sheets. Comprehensive guidance toward effective analysis techniques helps readers make real-world use of the knowledge presented, with this new third edition containing the most current standards and methods for the post-crisis world. Coverage includes the complete statement analysis process, plus information on income tax accounting, employee compensation, and the impact of foreign exchange rates on the statements of multinational corporations. Financial statement analysis gives investment professionals important insights into the true financial condition of a company. With it, realistic valuations can be made for investment, lending, or merger and acquisition purposes. The process is becoming increasingly complex, but this book helps readers deal with the practical challenges that arise at the international level. Understand the accounting mechanics behind financial reporting Discover the differences between statements from around the world Learn how each financial statement element affects securities valuation Master analysis for clues into operations and risk characteristics Amid an uncertain global economic climate, in today's volatile international markets, the ability to effectively evaluate financial statements is a critical skill. Standards and conditions are continuously evolving, and investment professionals need a strong, up-to-date resource for the latest rules and best practices. International Financial Statement Analysis provides this and more, with clarity and expert advice.
