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Author: Bobae Choi
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper examines the role of sophisticated investors in pricing future earnings. Using the future earnings response coefficient (FERC) model recently developed by Ettredge et al. (2005), we test the effect of analyst following and institutional ownership on the informativeness of stock returns on future earnings. We find that the informativeness of stock returns on future earnings, measured as the future earnings response coefficient, increases with the analyst following and institutional investors. We also investigate how the recently introduced Regulation Fair Disclosure in Korea affects the informativeness of stock returns on future earnings and its relation with analyst following and institutional investors. The results show that the regulation decreases the future earnings response coefficient in general and its relation with the analyst following, suggesting that their superior ability is impaired after the regulation. Our main results do not change much after controlling for the change in analyst following after the regulation and additional variables such as firm size, growth, earnings variability and accounting conservatism.
Author: Bobae Choi
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper examines the role of sophisticated investors in pricing future earnings. Using the future earnings response coefficient (FERC) model recently developed by Ettredge et al. (2005), we test the effect of analyst following and institutional ownership on the informativeness of stock returns on future earnings. We find that the informativeness of stock returns on future earnings, measured as the future earnings response coefficient, increases with the analyst following and institutional investors. We also investigate how the recently introduced Regulation Fair Disclosure in Korea affects the informativeness of stock returns on future earnings and its relation with analyst following and institutional investors. The results show that the regulation decreases the future earnings response coefficient in general and its relation with the analyst following, suggesting that their superior ability is impaired after the regulation. Our main results do not change much after controlling for the change in analyst following after the regulation and additional variables such as firm size, growth, earnings variability and accounting conservatism.
Author: Benjamin C. Ayers
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
This paper presents evidence that prices of firms followed by sell-side analysts and favored by institutional investors incorporate future earnings earlier than prices of other firms. Our tests are based on regressions of year t abnormal returns on earnings changes from years t-1, t, and t+1. We find that lead coefficients for firms most heavily followed by analysts or favored by institutions are greater than lead coefficients for firms with little analyst following or institutional holdings. In contrast, contemporaneous coefficients for analyst and institutional favorites are less than contemporaneous coefficients for other firms. Furthermore, the results for analysts and institutions are incremental to each other. In addition, neither effect is due to the fact that price leads are an increasing function of firm size.One possible explanation for our results is that market professionals are more skilled than other investors in analyzing publicly available information. Alternatively, the positive association between price leads and professional interest may exist only because management provides more detailed information to sell-side and buy-side analysts than to individual investors. This possibility prompted the SEC to issue Regulation FD, which creates a more level playing field for all investors by eliminating selective disclosures. Our results, which are based on data prior to the passage of Regulation FD, suggest that the quot;distribution gainquot; sought by the SEC may come with an quot;allocation cost.quot; That is, if Regulation FD causes management to reduce the flow of information to market professionals, the length of price leads could be shortened.
Author: Joseph D. Piotroski
Publisher:
ISBN:
Category :
Languages : en
Pages : 48
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Book Description
We investigate the extent to which the trading and trade-generating activities of three informed market participants -- financial analysts, institutional investors, and insiders -- influence the relative amount of firm-specific, industry-level and market-level information impounded into stock prices, as measured by stock return synchronicity. We find that stock return synchronicity is positively associated with analyst forecasting activities, consistent with analysts increasing the amount of industry-level information in prices through intra-industry information transfers. In contrast, stock return synchronicity is inversely related to insider trades, consistent with these transactions conveying firm-specific information. Supplemental tests show that insider and institutional trading accelerate the incorporation of the firm-specific component of future earnings news into prices alone, while analyst forecasting activity accelerates both the industry and firm-specific component of future earnings news. Our results suggest that all three parties influence the firm's information environment, but the type of price-relevant information conveyed by their activities depends on each party's relative information advantage.
Author: Lucy F. Ackert
Publisher:
ISBN:
Category : Seasonal variations (Economics)
Languages : en
Pages : 34
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Book Description
Author: Juan Wang
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study examines how institutions respond to insider trade in addition to accounting information. I show that transient institutions defined as those with short investment horizon and high turnover, reduce holdings in the following quarters when insiders are net sellers following earnings announcements. Moreover, I show that transient institutions significantly reduce more holdings when insiders are net sellers and firms also meet or beat analyst forecasts. In addition, I show that the greater reduction in transient institutional holdings when insiders are net sellers and firms also meet or beat analyst forecasts do not appear to be affected by earnings management and expectation guidance. Finally, I show that insider trade profits in terms of future abnormal returns are lower when transient institutional holdings are higher. Overall, these findings provide evidence on the ability of institutions to process insider trade information in addition to accounting numbers.
Author: Yasuyuki Fuchita
Publisher: Brookings Institution Press
ISBN: 0815729820
Category : Business & Economics
Languages : en
Pages : 216
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Book Description
A Brookings Institution Press and Nomura Institute of Capital Markets Research publication Developed country capital markets have devised a set of institutions and actors to help provide investors with timely and accurate information they need to make informed investment decisions. These actors have become known as "financial gatekeepers" and include auditors, financial analysts, and credit rating agencies. Corporate financial reporting scandals in the United States and elsewhere in recent years, however, have called into question the sufficiency of the legal framework governing these gatekeepers. Policymakers have since responded by imposing a series of new obligations, restrictions, and punishments—all with the purpose of strengthening investor confidence in these important actors. Financial Gatekeepers provides an in-depth look at these new frameworks, especially in the United States and Japan. How have they worked? Are further refinements appropriate? These are among the questions addressed in this timely and important volume. Contributors include Leslie Boni (University of New Mexico), Barry Bosworth (Brookings Institution), Tomoo Inoue (Seikei University), Zoe-Vonna Palmrose (University of Southern California), Frank Partnoy (University of San Diego School of Law), George Perry (Brookings Institution), Justin Pettit (UBS), Paul Stevens (Investment Company Institute), Peter Wallison (American Enterprise Institute).
Author: John J. Murphy
Publisher: Penguin
ISBN: 0735200661
Category : Business & Economics
Languages : en
Pages : 579
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Book Description
John J. Murphy has updated his landmark bestseller Technical Analysis of the Futures Markets, to include all of the financial markets. This outstanding reference has already taught thousands of traders the concepts of technical analysis and their application in the futures and stock markets. Covering the latest developments in computer technology, technical tools, and indicators, the second edition features new material on candlestick charting, intermarket relationships, stocks and stock rotation, plus state-of-the-art examples and figures. From how to read charts to understanding indicators and the crucial role technical analysis plays in investing, readers gain a thorough and accessible overview of the field of technical analysis, with a special emphasis on futures markets. Revised and expanded for the demands of today's financial world, this book is essential reading for anyone interested in tracking and analyzing market behavior.
Author: H. Nejat Seyhun
Publisher: MIT Press
ISBN: 9780262692342
Category : Business & Economics
Languages : en
Pages : 452
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Book Description
Learn how to profit from information about insider trading. The term insider trading refers to the stock transactions of the officers, directors, and large shareholders of a firm. Many investors believe that corporate insiders, informed about their firms' prospects, buy and sell their own firm's stock at favorable times, reaping significant profits. Given the extra costs and risks of an active trading strategy, the key question for stock market investors is whether the publicly available insider-trading information can help them to outperform a simple passive index fund. Basing his insights on an exhaustive data set that captures information on all reported insider trading in all publicly held firms over the past twenty-one years—over one million transactions!—H. Nejat Seyhun shows how investors can use insider information to their advantage. He documents the magnitude and duration of the stock price movements following insider trading, determinants of insiders' profits, and the risks associated with imitating insider trading. He looks at the likely performance of individual firms and of the overall stock market, and compares the value of what one can learn from insider trading with commonly used measures of value such as price-earnings ratio, book-to-market ratio, and dividend yield.
Author: Burton G. Malkiel
Publisher: W. W. Norton & Company
ISBN: 0393330338
Category : Business & Economics
Languages : en
Pages : 454
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Book Description
Updated with a new chapter that draws on behavioral finance, the field that studies the psychology of investment decisions, the bestselling guide to investing evaluates the full range of financial opportunities.
Author: Katrina Avila Munichiello
Publisher: Tuttle Publishing
ISBN: 9780804848992
Category : Literary Collections
Languages : en
Pages : 256
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Book Description
A Tea Reader contains a selection of stories that cover the spectrum of life. This anthology shares the ways that tea has changed lives through personal, intimate stories. Read of deep family moments, conquered heartbreak, and peace found in the face of loss. A Tea Reader includes stories from all types of tea people: people brought up in the tea tradition, those newly discovering it, classic writings from long-ago tea lovers and those making tea a career. Together these tales create a new image of a tea drinker. They show that tea is not simply something you drink, but it also provides quiet moments for making important decisions, a catalyst for conversation, and the energy we sometimes need to operate in our lives. The stories found in A Tea Reader cover the spectrum of life, such as the development of new friendships, beginning new careers, taking dream journeys, and essentially sharing the deep moments of life with friends and families. Whether you are a tea lover or not, here you will discover stories that speak to you and inspire you. Sit down, grab a cup, and read on.
