Essays on information and conflicts of interest in stock recommendations

Missed price targets or off-the-mark earnings forecasts occur all the time. Overall all buy- and sell recommendations yield returns in line with the market.

Essays on Information and Conflicts of Interest in Stock Recommendations

The third essay examines the credibility in underwriter analyst stock recommendations of Scandinavian IPO firms for the period The impact to recommendations from journalists was significantly larger than analyst recommendations, implying a tradeoff between the size of pre- publication cumulative abnormal returns and the publication-day effect.

He or she is expected to understand how the industry operates and how it adapts to changing economic and financial conditions. The second essay analyzes the initiated and changed recommendations published in six well-known Swedish newspapers and business magazines for the period using a buy-and-hold abnormal returns BHARs approach.

Buy recommendations were misleading investors, whereas sell recommendations were leading them correctly. The results support the superior information hypothesis The positive publication-day effect for buy recommendations was almost fully reversed after 20 days, supporting the price-pressure hypothesis, and the effect for sell recommendations was negative and prices continued to drift down, supporting the information hypothesis.

Zeroing in on individual companies, analysts look at sales and profit figures, outstanding debt and other fundamental data, and they evaluate company management. Analysts polish their reputations and earn raises, bonuses and partnerships by making accurate predictions and winning top rankings in an annual poll by Institutional Investor magazine.

This thesis brings together three separate empirical essays on the information and conflicts of interest in stock recommendations. Following buy- and sell recommendations from analysts yielded BHARs in line with those from following journalist recommendations, which in turn gives rise to returns in line with the market.

This asymmetry could be due to positive information from the management of the company being more intricate to interpret than negative and generally exaggerated in a positive direction. Generally, an analyst is assigned to "cover" a handful of companies in a specific industry.

This phenomenon holds for recommendations from both analysts and journalists. So the analysts must be jumping out the windows, or at least urging investors to sell and cut their losses, right? But there are some less benign factors in poor analyst performance as well. Late in analysts were tripping over each other to tout Internet stocks, leading investors to enormous losses as that entire sector collapsed this year.

Recommendations from underwriters comes sooner after the IPO date and performs worse before and in the days surrounding the recommendation date, showing no evidence that underwriters try to "boost" IPO firms in the aftermarket trading.

Analysts seem to hand their information to private clients before publication, whereas no such information-leaking pattern was observed for recommendations from journalists.

As was done in essay 1, the results here distinguish between recommendations from analysts and journalists. Its small size and limited number of actors makes the Swedish stock market an interesting comparison to the U. Quote Three months ago shares of online bookseller Amazon.

Underwriter analyst recommendations are found to outperform non-underwriter analyst recommendations during the first year from publication, yielding substantially higher mean excess returns.

What do analysts do to earn annual salaries that typically run in the six and seven figures at top brokerages and investment banks?Interest conflicts, stock recommendations and investor attention Although a number of previous studies have investigated conflicts of interest faced by analysts, they focus on the investment banking and brokerage divisions.

Conflict-of-Interest Reforms and Investment Bank Analysts’ Research Biases* Yuyan Guan analysts’ stock recommendations and earnings forecasts across different types of analyst If the reforms resolve investment banking-related conflicts of interest, we expect to find a.

* A conflict of interest could impair an individual’s ability to perform his or her duties and responsibility objectively. The Contract Manager has the following conflicts: * Fails to disclose conflict of interest in tender invitation list ie brother; * Partakes in selection recommendation process whilst.

successful in curbing conflicts of interest linked to investment bank business.

Buy, Hold or Sell: Do Conflicts of Interest Mar Analysts’ Stock Recommendations?

Changes in the behavior of brokerage houses are examined through recommendations they issued for US common stocks between July and December Download Citation on ResearchGate | Essays on information and conflicts of interest in stock recommendations / | Added t.p.

with thesis statement inserted. Thesis (doctoral)--Göteborgs. Stock recommendations Printed media Price-pressure hypothesis Information hypothesis Journalists Analysts EMH Initiations Information asymmetry Initial public offerings Quiet period Underwriter analysts.

Abstract: This thesis brings together three separate empirical essays on the information and conflicts of interest in stock recommendations.

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Essays on information and conflicts of interest in stock recommendations
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