Using hand-collected information, we find that analysts who own stock in a company they follow make more informative recommendations and exert more effort in covering the company. However, we also find that analysts with stock ownership issue more optimistic target price forecasts. These...

Researchers have traditionally inferred analysts’ coverage initiations using an analyst’s and/or a broker’s first recommendation for a firm in IBES. Using a large hand-collected sample of analyst reports announcing coverage initiations, we document that 17% of the traditionally-inferred...