Erschienen in:Mays Business School Research Paper ; No. 2608619
Umfang:
1 Online-Ressource (47 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2608619
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 19, 2015 erstellt
Beschreibung:
We document that consistent patterns of sales growth that are incongruent with underlying fundamentals are followed by significant stock price reversals. In contrast, no stock return reversals are found for firms that achieve the same level of sales growth in an inconsistent manner. Furthermore, future earnings announcement returns mimic the pattern of abnormal stock returns documented for consistent and inconsistent-performance portfolios, corroborating our main findings. The results are robust to controls including magnitude of sales growth, fundamental strength, and business cycle risk exposures. Our evidence is consistent with representativeness bias affecting investor interpretation of consistent sales growth patterns