Do security analysts exhibit persistent differences in stock picking ability?

Article Abstract:

The financial press focuses on identifying and publicizing high performance sell-side security analysts, the area in which analyst performance is often based on the profitability of their prior stock recommendations. The examination of this stock picking ability of security analysts shows that the analysts whose recommendation revisions earned the most or least returns in the past continue to outperform or underperform in the future. A trading strategy taking long or short positions in recommendation upgrades or downgrades conditional on analysts' prior performance is unprofitable.

Practice

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Information content of equity analyst reports

Article Abstract:

The topics of Institutional Investor All-American analyst reports are reviewed to examine firm's price targets from the relation between revisions of earnings forecast and stock recommendations to market returns.

Methods, Analysis, Capital market, Capital markets

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Dynamic forecasting behavior by analysts: theory and evidence

Article Abstract:

Association between forecasting behavior and performance of financial analysts are examined.

Management, Company business management

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