Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 15, 2008 erstellt
Description:
Contrary to concerns about the equity research analysis industry's perceived decline, we find that both the amount of coverage and the precision of earnings estimates have increased over the past twenty-four years. We also study how the stock market behaves around changes in analyst coverage. We find that firms added (dropped) by analysts have positive (negative) contemporaneous abnormal returns and zero (positive) future abnormal returns. Evidence on the bias of cash flow expectations and divergence of opinions suggests a mispricing rather than a fundamentals explanation. Moreover, the abnormal returns are captured by individuals rather than institutions and are compensation to individuals for holding illiquid stocks