Prophets during boom and gloom downunder
It has become more apparent in recent years that equity analysts come under much internal andexternal pressure that is likely to dilute the value of their forecasts and recommendations. In this paperwe find, similar to Jegadeesh et al. (Jegadeesh, N., Kim, J., Krische, S., Lee, c., 2004, Analyzing theAnalysts: When Do Recommendations Add Value? Journal of Finance 59, 1083-1124.). thatAustralian analysts consistently favour large high momentum growth stocks and that theirrecommendations, if anything, have negative value with the exception of those made in relation tolow momentum growth stocks. However, we do find evidence to suggest that changes in the analysts'recommendations could provide a useful input into one's investment decisions. When we divided oursample up into the growth market of the late 1990s and the falling market of the early 2000s, we findthat analysts were moving their recommendations (even) more towards high momentum growth stocksduring the boom years but in the opposite direction during the gloom years.
Year of publication: |
2007
|
---|---|
Authors: | Azzi Sarah ; Bird Ronald |
Publisher: |
Elsevier |
Saved in:
freely available
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