Download or read book Earnings Forecasts and Share Price Reversals written by Werner Fransiscus Marcel De Bondt and published by Cfa Inst. This book was released on 1992 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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.
Download or read book The Handbook of Corporate Earnings Analysis written by Brian R. Bruce and published by Irwin Professional Publishing. This book was released on 1994 with total page 398 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Expecting to Be Surprised written by Katrina Ellis and published by . This book was released on 2006 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: It has been well-documented that prices respond quickly, if not completely, to the information in quarterly earnings announcements. In this paper we show that after conditioning on past earnings surprises, companies that meet analyst expectations have positive (negative) returns following a prior negative (positive) surprise. We attribute this price response to investors expecting to be surprised, in that they expect past earnings surprises to continue into the future. As meeting expectations is a reversal of the surprise trend, the investors react to this new information by reversing the price trend. The price response to meeting earnings forecasts appears to be due to investor overreaction, with subsequent returns undoing the overreaction.
Download or read book Momentum Strategies written by Louis K. C. Chan and published by . This book was released on 1995 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: We relate the predictability of future returns from past returns to the market's underreaction to information, focusing on past earnings news. Past return and past earnings surprise each predict large drifts in future returns after controlling for the other. There is little evidence of subsequent reversals in the returns of stocks with high price and earnings momentum. Market risk, size and book-to- market effects do not explain the drifts. Security analysts' earnings forecasts also respond sluggishly to past news, especially in the case of stocks with the worst past performance. The results suggest a market that responds only gradually to new information.
Download or read book The Effect of Analysts Earnings Forecasts on Share Price written by Aileen Twohig and published by . This book was released on 2005 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Cambridge Handbook of Psychology and Economic Behaviour written by Alan Lewis and published by Cambridge University Press. This book was released on 2018-02-15 with total page 808 pages. Available in PDF, EPUB and Kindle. Book excerpt: There has recently been an escalated interest in the interface between psychology and economics. The Cambridge Handbook of Psychology and Economic Behaviour is a valuable reference dedicated to improving our understanding of the economic mind and economic behaviour. Employing empirical methods - including laboratory and field experiments, observations, questionnaires and interviews - the Handbook provides comprehensive coverage of theory and method, financial and consumer behaviour, the environment and biological perspectives. This second edition also includes new chapters on topics such as neuroeconomics, unemployment, debt, behavioural public finance, and cutting-edge work on fuzzy trace theory and robots, cyborgs and consumption. With distinguished contributors from a variety of countries and theoretical backgrounds, the Handbook is an important step forward in the improvement of communications between the disciplines of psychology and economics that will appeal to academic researchers and graduates in economic psychology and behavioral economics.
Download or read book Stock Price Reaction to Quarterly Earnings Announcements with Respect of Outlook Changes and Deviation to Consensus Forecast written by Benjamin Schmitt and published by . This book was released on 2015-06-12 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bachelor Thesis from the year 2008 in the subject Business economics - Investment and Finance, grade: 1.1, EBS European Business School gGmbH (Finance), language: English, abstract: Many authors have already studied about stock price reactions after earnings announcements yet, which is because of the importance of earnings announcements, in particular quarterly earnings announcements, for many investors. However, all major studies concerning this topic deal with long-term scenarios, the stock's price performance is measured for a time period of at least three quarters. Due to the fact that there are many investors, especially institutional investors such as hedge funds that trade stocks much more frequently, the existing studies are not relevant for them. This paper studies stock price reactions around quarterly earnings announcements for companies listed in Deutscher Aktienindex (DAX) or Midcap DAX (MDAX) with respect to changes of the company's full-year outlook and of earnings surprise regarding analyst consensus forecast within ten days before and after the announcement date. Hence, this paper aims to analyse short-term reaction to quarterly earnings announcements, which are of relevance for all investors, whose investment strategy is, at least partially, focussing on the short-term performance. The main target group of this analysis are therefore hedge funds and investors that run short-term strategies. Due to the fact that the widespread Event Study Methodology is focused on the long-term, it is irrelevant for this analysis.
Download or read book The Present Value of Corporate Profits A Forecasters Survey Perspective written by Michal Andrle and published by International Monetary Fund. This book was released on 2019-01-16 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents and discusses the estimates of the present value of corporate profits in the United States from 1984 to 2018. To value the expected income stream, it uses the long-range forecasts of professional forecasters for pre-tax corporate earnings and long-term Treasury note yields, sourced from the Blue Chip Economic Indicators survey. The appraised value of corporate earnings can point in real time at periods where market prices are deviating from valuations implied by expected earnings and interest rates. Market participants' forecasts seem to interpret most of the earnings fluctuations as permanent, underestimating the cyclical fluctuations The over-reaction to transitory shocks and changes in long-term outlook leads to swings in the valuation, in line with swings in the observed market prices.
Download or read book Beyond Greed and Fear written by Hersh Shefrin and published by . This book was released on 2002 with total page 410 pages. Available in PDF, EPUB and Kindle. Book excerpt: Even the best Wall Street investors make mistakes. No matter how savvy or experienced, all financial practitioners eventually let bias, overconfidence, and emotion cloud their judgement and misguide their actions. Yet most financial decision-making models fail to factor in these fundamentals of human nature. In Beyond Greed and Fear, the most authoritative guide to what really influences the decision-making process, Hersh Shefrin uses the latest psychological research to help us understand the human behavior that guides stock selection, financial services, and corporate financial strategy. Shefrin argues that financial practitioners must acknowledge and understand behavioral finance--the application of psychology to financial behavior--in order to avoid many of the investment pitfalls caused by human error. Through colorful, often humorous real-world examples, Shefrin points out the common but costly mistakes that money managers, security analysts, financial planners, investment bankers, and corporate leaders make, so that readers gain valuable insights into their own financial decisions and those of their employees, asset managers, and advisors. According to Shefrin, the financial community ignores the psychology of investing at its own peril. Beyond Greed and Fear illuminates behavioral finance for today's investor. It will help practitioners to recognize--and avoid--bias and errors in their decisions, and to modify and improve their overall investment strategies.
Download or read book Earnings Forecasts and the Predictability of Stock Returns written by Joel Lander and published by . This book was released on 1997 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book A New Look at Value Line Earnings and Stock Price Forecasts written by Philip L. Baird and published by . This book was released on 2013 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research investigates Value Line short-horizon and long-horizon earnings and stock price forecasts. From 1987-1998, Value Line analysts issued optimistic quarterly and annual EPS forecasts. This is consistent with prior research showing that analysts generally issued upwardly biased earnings forecasts. From 1999-2008, however, the optimistic bias in Value Line forecasts disappeared. Value Line's long-horizon earnings forecasts were too optimistic, while its long-horizon target price forecasts were slightly conservative. Like analysts generally, Value Line analysts were systematically optimistic with respect to prior-quarter change in earnings, and they systematically underreacted to negative prior-quarter earnings surprises. From 1999-2008, Value Line analysts optimally incorporated information from prior forecast errors for all but the bottom 25% of firms in terms of quarterly earnings surprise. Value Line forecasts appear to hold unique potential for use in equity valuation models, allowing researchers to avoid the distorting assumptions typically required in prior approaches to valuation modeling. The source of the impressive performance of Value Line's Timeliness rank appears to stem from bias in analysts' forecasts. Value Line analysts were consistently more conservative (less aggressive) in their forecasts for rank 1 stocks than in their forecasts for rank 5 stocks.
Download or read book Over reactions in Analysts Long term Earnings Growth Forecasts and Their Implications for Market Anomalies written by Aili Li and published by . This book was released on 1998 with total page 428 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Stock Market Overreaction to Management Earnings Forecasts written by Jean-Sebastien Michel and published by . This book was released on 2014 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: I hypothesize that the stock market overreacts to management earnings forecasts because of the uncertainty surrounding them. I find that negative management forecast surprises lead to a -5.9% abnormal return around the forecast and a 1.9% correction in the 2-month period after earnings are announced. Positive surprises work in the opposite direction, with a 1.9% abnormal return and a -1.7% correction. The level of the stock market overreaction varies with the forecast and firm characteristics, but the marginal impact remains the same: a 1% change in the stock market reaction around the forecast is associated with a 0.4% correction.
Download or read book Book to Market Components Future Security Returns and Errors in Expected Future Earnings written by Bruce K. Billings and published by . This book was released on 1999 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the differential relations between components of book-to-market ratios and future stock returns. The decomposition follows the Ryan (1995) and Beaver and Ryan (1998) fixed effects estimation approach to categorize the deviations between book value and market value. We focus on a persistent firm effect (bias component), a lag recognition component, and a residual component. We find that the inverse relation between book-to-market and future returns identified in previous literature can be attributed to both the lag and bias components, but the lag component is the dominant factor. Given that lag is constructed by regressing book-to-market ratios on lagged price changes, our results are consistent with the lag component capturing systematic stock price reversals. We further find that the components have unique relations with future earnings forecasts and forecast revisions pertaining to different forecast horizons. Our component-level analysis provides insight into this market anomaly and suggests that the ability of book-to-market to predict returns primarily derives from its tendency to reflect systematic errors in expected future earnings. If risk plays a role in the future return relation, it appears to be a secondary effect.
Download or read book Time Series Analysis and Its Applications written by Robert H. Shumway and published by . This book was released on 2014-01-15 with total page 568 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Change in Financial Analysts Forecast Attributes for Value and Growth Stocks written by Pieter Johannes De Jong and published by ProQuest. This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This research will concentrate on the changes in earnings forecasts, forecast accuracy and forecast dispersion for growth and value stocks after Reg FD. Each topic is presented in a separate essay. The first essay tests if growth and value stock returns respond more to forecasted earnings changes than they do to changes in earnings and whether these stock returns respond in a different fashion before and after Reg FD. This phenomenon is stronger for growth stock portfolio strategies than it is for value stock portfolios. After Reg FD, the overall impact of earnings expectations on stock returns is smaller, especially for growth stock returns. The second essay examines financial analysts' earnings forecast accuracy in value and growth stocks before and after the introduction of Reg FD. Accuracy for both stock groups (value and growth stocks) has improved after the introduction of Reg FD. The results in this essay provide additional evidence indicating that analysts did not just misinterpret available news but consciously tried to maintain relationships with managers. However, Reg FD efficiently limited these relationships between managers of growth firms and analysts so that the monetary advantage from manipulating earnings forecasts before the introduction of Reg FD no longer exists. The third essay evaluates the hypothesis stating that forecast dispersion, on both growth and value stock returns, has increased after the introduction Reg FD. However, the increased dispersion found at the second quarter of 2001 drastically dissipates at the second quarter of 2002, although value stock forecast dispersion before earnings announcement and value stock belief jumbling remain higher. The results in this essay suggest that corporate voluntary disclosure created a greater variety of opinions and, therefore, more uncertainty about value stocks. Also, value stock returns have a stronger inverse relationship with dispersion because financial analysts have become more uncertain about value firms' performance. The bigger the disagreement about a stock's value, the higher the market price relative to the true value of the stock, and the lower its future return.
