Are Analyst Top Picks Informative?

• 成果类型: Article
• 署名作者: Birru, Justin; Gokkaya, Sinan; Liu, Xi; Stulz, Rene
• 署名单位: University System of Ohio; Ohio State University; University System of Ohio; Ohio University; University System of Ohio; Miami University; National Bureau of Economic Research
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhad099
• 发表日期: 2024
• 页码: 1538
• 关键词: CONFLICTS-OF-INTEREST; EARNINGS FORECASTS; GLOBAL SETTLEMENT; performance; recommendations; BEHAVIOR; IMPACT; stocks; RISK; BIAS

摘要

Following the Global Settlement, analysts extensively use a top pick designation allowing for greater granularity of information among buy recommended stocks, but conflicts of interest can potentially influence this designation. Examining a novel sample of top picks, we find that a calendar-time portfolio of top picks generates an abnormal performance of 17.6% per year. Top picks have greater investment value than do buy recommendations and alternative analyst investment strategies. Both institutional and retail investors trade in response to top picks. However, only institutional investors appear to identify top picks that have greater investment value when they are announced.