Arbeitspapier
Projected earnings accuracy and the profitability of stock recommendations
Analysts providing more accurate earnings forecasts also issue more profitable recommendations. We demonstrate how investors can profit from this contemporaneous link by differentiating between able and lucky analysts. In line with previous studies, we find that past track records alone are not sufficient to identify profitable recommendations. Only skilled analysts working in a superior environment provide consistently profitable recommendations. The overall profitability of their recommendations is not driven by a post-announcement drift effect. We find that an implementable, i.e. look-ahead bias free, trading strategy based on the projected - rather than past - earnings accuracy yields substantial excess returns.
- Sprache
-
Englisch
- Erschienen in
-
Series: CFR Working Paper ; No. 10-17 [rev.]
- Klassifikation
-
Wirtschaft
Information and Market Efficiency; Event Studies; Insider Trading
Financial Forecasting and Simulation
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
- Thema
-
analysts
portfolio management
profitability of recommendations
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Hess, Dieter
Kreutzmann, Daniel
Pucker, Oliver
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Cologne, Centre for Financial Research (CFR)
- (wo)
-
Cologne
- (wann)
-
2011
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Hess, Dieter
- Kreutzmann, Daniel
- Pucker, Oliver
- University of Cologne, Centre for Financial Research (CFR)
Entstanden
- 2011
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