Download or read book The Incremental Impact of Analyst Initiation of Coverage written by Paul J. Irvine and published by . This book was released on 2003 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: I compare the return surrounding a sell-side analyst's initiation of coverage to the return surrounding a recommendation by an analyst who already covers the stock. The market responds more positively to analysts' initiations than to other recommendations. The incremental price impact of an initiation is 1.02% greater than the reaction to a recommendation by an analyst who already covers the stock. I examine whether the hypothesis that analyst coverage increases liquidity explains this incremental return. I find that liquidity improves after initiations, but that one must extend the liquidity hypothesis in order to fully explain the incremental price impact. Liquidity gains subsequent to analyst initiation depend on the analyst's recommendation. The more positive the initial recommendation, the greater the subsequent liquidity improvement. I also find that the initiation abnormal return correlates with the subsequent improvements in liquidity. Corporations should encourage analyst coverage to capture this liquidity benefit.

Download or read book The IPO Decision written by Jason Draho and published by Edward Elgar Publishing. This book was released on 2004-01-01 with total page 400 pages. Available in PDF, EPUB and Kindle. Book excerpt: Annotation Initial public offerings (IPOs) garnered unprecedented positive attention in the 1990s for their spectacular returns and central role in entrepreneurial activity. Subsequent revelations of unscrupulous IPO allocation and promotion practices cast a less fa.

Download or read book Financial Analysts and Information Processing on Financial Markets written by Jan-Philipp Matthewes and published by BoD – Books on Demand. This book was released on 2015-01-28 with total page 185 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial analysts play an ambivalent role on financial markets: On the one hand investors and the media frequently follow their advice, on the other hand they are regularly discredited when their forecasts or recommendations prove to be erroneous. This cumulative thesis explores the informational content of financial analysts’ forecasts for investors by addressing three specific topics: Consensus size as a rudimentary investment signal, the association of analysts’ target prices with business sentiment, and the consistency of analysts’ different investment signals in the context of the 2008 financial crisis. Overall, the thesis provides additional evidence that investors can profit from analysts’ forecasts and recommendations. However, it is also shown that investors need to be very selective about which signal to rely on and in which context to use these because analysts’ investment signals can also be heavily biased and erroneous. About the author: Jan-Philipp Matthewes studied ‘Economics’ at the University of Cologne, Germany, and holds a Dean’s Award from the Faculty of Economics and Social Sciences. His research focus on financial analysts evolved while working in equity research at a leading German bank. The PhD-thesis was supervised by Prof. Dr. Martin Wallmeier, Finance and Accounting, at the University of Fribourg, Switzerland. Since 2013 Jan-Philipp Matthewes is the managing director of the boutique private equity firm ‘Matthewes Capital Invest GmbH’.

Download or read book The Value Effects of Analysts Coverage Initiations written by Akin Sayrak and published by . This book was released on 2003 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the effects of analyst forecast coverage initiations in the United States in the 1995-2000 time period. It is usually believed that analysts provide valuable information about the firms they cover as well as reduce agency costs by acting as a monitor for the managers. This, in turn, may reduce the information problems between the firms and the investment community. To the extent that these attributes are valuable,investors may take into account the presence of analysts in pricing of securities. By using a unique data set of analysts' coverage initiations, the evidence presented herein supports the prediction that firms experience positive abnormal returns (of about three percent) as well as enhanced liquidity and lower information costs at the time of the initiations. Our results are more pronounced for NASDAQ firms versus NYSE and AMEX firms as consistent with the previously observed differences among firms traded in these markets. Finally, the reputation of the analyst company is positively associated with the initiationreturn, and the initiation return is less if the analyst company is also an underwriter of the IPO.

Download or read book Economic and Business Management written by Xiaoxia Huang and published by CRC Press. This book was released on 2022-03-22 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the rapid development and drastic change of the world economy, "Digital Finance", "Internet Finance", "Science and Technology Finance" have become new hotspots, which also represent the future trend of economy development in the era of big data. Enterprises are facing more uncertainty, opportunities coexist with challenges. There are more possibilities for economic development and enterprise management to accelerate the integration of cutting-edge research results, to deepen hot topics discussion and to promote opinion exchanges among academic and business circles. The Sixth International Conference on Economic and Business Management (FEBM2021) was successfully held online on October 16-17, 2021, and aimed to provide a platform for researchers, engineers, academics as well as industry professionals from all over the world to present their latest research findings and development activities in economic and business management. These proceedings include 51 accepted articles selected from 94 submissions.

Download or read book The Economics of Demutualization written by Felix Treptow and published by Springer Science & Business Media. This book was released on 2007-11-03 with total page 123 pages. Available in PDF, EPUB and Kindle. Book excerpt: Felix Treptow examines the changing relationship between exchanges and issuers, analyses the micro- and macroeconomic drivers of the demutualization decision, and investigates its impact on market liquidity. He presents a detailed analysis of both the determinants as well as the consequences of the demutualization of securities exchanges.

Download or read book Venture Capitalists Exit Strategies under Information Asymmetry written by Matthias Eckermann and published by Springer Science & Business Media. This book was released on 2007-10-17 with total page 301 pages. Available in PDF, EPUB and Kindle. Book excerpt: Matthias Eckermann analyzes how venture capitalists (VCs) integrate information efficiency considerations into their exit strategies. He shows that VCs adopt specific strategies to cope with information gaps upon exit in terms of timing, exit vehicles and promotion efforts. On this basis he develops a framework to help VCs to improve profitability through decisive exit strategies.

Download or read book The Handbook of Research on Top Management Teams written by Mason Andrew Carpenter and published by Edward Elgar Publishing. This book was released on 2011-01-01 with total page 457 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Handbook presents original research and theory on executives, top management teams, and boards of directors and illustrates the vital importance of this field of study. Top management teams are responsible for the strategic choices and major decisions in organizations. These organizations are a reflection of the members that make up their strategic management. The roles top management play and the impact they have are clearly visible in firms around the world, both large and small. The international group of authors that comprise this volume address questions central to the field of strategy and strategic leadership. They review the determinants of top management team composition, their social networks, and executive dismissal; the psychological and personality profiles of top executives; the methodologies relevant to the study of top teams; and the roles of top executives in cross business unit collaboration, competitive behavior, and strategic entrepreneurship. Each chapter presents path-breaking research and provides a roadmap for new research avenues and agendas. Professors, students and researchers in the area of strategy, management and strategic leadership will find this book an invaluable resource.

Download or read book Does the Scope of Sell Side Analyst Industry Matter An Examination of Bias Accuracy and Information Content of Analyst Reports written by Kenneth J. Merkley and published by . This book was released on 2016 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite broad interest in analysts' activities, our understanding of sell-side analysts as a collective group is limited. This paper examines changes in the scope of the sell-side analyst industry and whether these changes impact information dissemination. Changes in the number of analysts covering an industry affect analyst competition and have significant spillover effects. When some firms in an industry experience drops in analyst coverage, the aggregate quality of the analyst reports of other firms in an industry (i.e., firms that did not experience a direct change in analyst coverage) decreases along several dimensions: analysts' forecasts are less accurate and more biased, they exert less effort, and their reports have lower information convergence and provide less information to market participants. We further find that the effects of changes in the number of analysts covering an industry are more pronounced in settings where analyst competition is more important. The spill-over industry effects we find are incremental to the effects of firm level changes in analyst coverage. Overall, having a more significant sell-side analyst industry presence has positive externalities that can result in better functioning capital markets.

Download or read book Three Essays on Asset Pricing Portfolio Choice and Behavioral Finance written by Ehud Peleg and published by ProQuest. This book was released on 2008 with total page 356 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Information Content of Announcements of Analyst Coverage written by Bruce C. Branson and published by . This book was released on 2000 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the security market response to the announcement of sell-side analysts' decisions to initiate coverage of a firm. We examine the market reaction to the initiation announcement, and the accompanying investment recommendation, by disaggregating our sample based on existing analyst coverage at the announcement date. We find, on average, a significantly larger, positive stock price reaction to buy recommendations conveyed in announcements of coverage initiation for firms already followed by other financial analysts compared to such announcements for firms with no prior analyst following.Tests show that the relation between the extent of preexisting analyst coverage and market response is non-linear and concave down in shape. Specifically, we find that lightly followed firms, on average, experience larger price reactions to announcements of coverage initiations than either previously uncovered firms or more heavily followed firms. We test for and find that this result is not attributable to the presence of an underwriting relationship existing between the analysts' employer and the firm receiving coverage.We do find that initiations by analysts named to Institutional Investor magazine's quot;All-American Research Teamquot; produce a significantly larger market reaction than do initiations by non All-American security analysts. In addition, similar to the market response associated with other types of information events, we observe that proxies for the richness of the initiated firms' pre-announcement information environment are associated with event day average abnormal returns.

Download or read book Who s Heard on the Street Determinants and Consequences of Financial Analyst Coverage in the Business Press written by Lynn L. Rees and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the determinants of financial analyst coverage in the business press and the effects of such coverage on analysts' careers. Using a sample of business press articles that quote a financial analyst, we compare each cited analyst with the other analysts who were actively following the same firm and could have been cited by the reporter, but were not. In general, we find that analysts quoted in the business press are more likely to possess characteristics that prior research has found to be positively associated with analyst quality, and that higher quality analysts are allotted more space in the articles. However, we cannot rule out the possibility that at least some of our analyst quality measures capture the effects of familiarity. After controlling for analyst quality and article tone, we find that analysts with unfavorable stock recommendations are more likely to be cited than analysts with favorable recommendations. We provide evidence of significant career benefits for analysts who receive publicity in the business press, which suggests that the business press is a source of valuable exposure for analysts.

Download or read book Analyst Coverage and Stock Price Crash Risk written by Yvonne I-Fang Lee and published by . This book was released on 2016 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study, I investigate the impact of analyst coverage changes on firms' subsequent firm-specific crash risk. Using a sample of 24,228 firm-year observations from 2000 to 2013, I show that changes in analyst coverage are negatively associated with changes in one-year-ahead crash risk. This result is consistent with analysts' information gathering activities and analyses limiting bad news hoarding behavior, and is generally inconsistent with analyst pressure leading to more bad news hoarding by managers. Moreover, I find the negative association between coverage changes and changes in subsequent crash risk to be more pronounced when the coverage change is attributable to Institutional Investor All-Star analysts. This supports my conjecture that a combination of skills, information acquisition advantages, and reputation allows star analysts to more efficiently disseminate information to the market and reduce the likelihood of future crashes for the firms they cover than their non-star counterparts. My findings are robust to the use of alternative measures of crash risk and after controlling for potential endogeneity. Finally, consistent with the argument that both the investors' demands for analyst coverage and the value analysts can provide through their information acquisition should increase with firm-specific risk, I document a positive association between prior firm-specific crash risk and analyst coverage for the firms. My findings also suggest that star and non-star analysts have distinct decision models and choose what firms to cover based on different factors.

Download or read book Advances in Behavioral Finance written by Richard H. Thaler and published by Russell Sage Foundation. This book was released on 1993-08-19 with total page 628 pages. Available in PDF, EPUB and Kindle. Book excerpt: Modern financial markets offer the real world's best approximation to the idealized price auction market envisioned in economic theory. Nevertheless, as the increasingly exquisite and detailed financial data demonstrate, financial markets often fail to behave as they should if trading were truly dominated by the fully rational investors that populate financial theories. These markets anomalies have spawned a new approach to finance, one which as editor Richard Thaler puts it, "entertains the possibility that some agents in the economy behave less than fully rationally some of the time." Advances in Behavioral Finance collects together twenty-one recent articles that illustrate the power of this approach. These papers demonstrate how specific departures from fully rational decision making by individual market agents can provide explanations of otherwise puzzling market phenomena. To take several examples, Werner De Bondt and Thaler find an explanation for superior price performance of firms with poor recent earnings histories in the tendencies of investors to overreact to recent information. Richard Roll traces the negative effects of corporate takeovers on the stock prices of the acquiring firms to the overconfidence of managers, who fail to recognize the contributions of chance to their past successes. Andrei Shleifer and Robert Vishny show how the difficulty of establishing a reliable reputation for correctly assessing the value of long term capital projects can lead investment analysis, and hence corporate managers, to focus myopically on short term returns. As a testing ground for assessing the empirical accuracy of behavioral theories, the successful studies in this landmark collection reach beyond the world of finance to suggest, very powerfully, the importance of pursuing behavioral approaches to other areas of economic life. Advances in Behavioral Finance is a solid beachhead for behavioral work in the financial arena and a clear promise of wider application for behavioral economics in the future.

Download or read book Analyst Coverage and Future Stock Price Crash Risk written by Guanming He and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Whether financial analysts play an effective role as information intermediaries and monitors has triggered a wide spread of debate among academics and practitioners to date. We complement this debate by investigating the association between analyst coverage and firm-specific future stock price crash risk. Using a large sample of U.S. public firms and the crash risk measure of Hutton et al. (2009), we find strong and robust evidence that a high level of analyst coverage is associated with lower future stock price crash risk, which offers support for the view that analysts serve positive roles as information intermediaries and monitors in the stock markets. We also find that the negative association between analyst coverage and stock price crash risk is stronger for firms that have high financial opacity. Additional analysis reveals that analyst forecast pessimism is negatively associated with future crash risk. Our study is thus of interest to investors who seek analyst reports for their investment decision-making. Also, our findings have some other important implications for practitioners, given the economic and welfare consequences of stock price crashes. Specifically, market participants can use analyst coverage as an indicator to assess future stock price crash risk, as well as the likelihood and extent of insiders' bad news hoarding that results in crash risk; this is particularly relevant to investors for their portfolio investment decisions and to suppliers and creditors who monitor their clients' creditworthiness.

Download or read book The Quarterly Review of Economics and Finance written by and published by . This book was released on 2006 with total page 928 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Shared Analyst Coverage written by David Hirshleifer and published by . This book was released on 2018 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Identifying stock connections by shared analyst coverage, we find that a connected-stock (CS) momentum factor generates a monthly alpha of 1.68% (t = 9.67). In spanning regressions, the alphas of industry, geographic, customer, customer/supplier industry, single- to multi-segment, and technology momentum factors are insignificant/negative after controlling for CS momentum. Similar results hold in cross-sectional regressions and in developed international markets. Sell-side analysts incorporate news about linked stocks sluggishly. These effects are stronger for complex/indirect linkages, and when sentiment is high. These results indicate that previously documented momentum spillover effects represent a unified phenomenon that is captured by shared analyst coverage.