Are Analyst Trade Ideas Valuable? / Justin Birru, Sinan Gokkaya, Xi Liu, René M. Stulz.

Format:

Book

Author/Creator:

Birru, Justin.

Contributor:

National Bureau of Economic Research.

Gokkaya, Sinan.

Liu, Xi.

Stulz, René M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26062.

NBER working paper series no. w26062

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

Using a novel database, we show that the stock-price impact of analyst trade ideas is at least as large as the impact of stock recommendation, target price, and earnings forecast changes, and that investors following trade ideas can earn significant abnormal returns. Trade ideas triggered by forthcoming firm catalyst events are more informative than ideas exploiting temporary mispricing. Institutional investors trade in the direction of trade ideas and commission-paying institutional clients do so earlier than non-clients. Analysts generating trade ideas are more established and are more likely to produce ideas for stocks with high dollar trading commissions in their coverage universe.

Notes:

Print version record

July 2019.