Measuring the added value of stock recommendations
Using data from the Stockholm Stock Exchange (SSE), we study the value added by (as distinct from the abnormal returns to) analysts’ recommendations. Recommending brokers’ clients trade profitably around positive recommendations at the expense of other brokers’ clients. Significant profits come from...
| Main Authors: | , , |
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| Format: | Journal article |
| Language: | English |
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Cambridge University Press
2019
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| _version_ | 1797108738967994368 |
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| author | Anderson, A Jones, H Martinez, JV |
| author_facet | Anderson, A Jones, H Martinez, JV |
| author_sort | Anderson, A |
| collection | OXFORD |
| description | Using data from the Stockholm Stock Exchange (SSE), we study the value added by (as distinct from the abnormal returns to) analysts’ recommendations. Recommending brokers’ clients trade profitably around positive recommendations at the expense of other brokers’ clients. Significant profits come from transactions before recommendation dates. Value added is greatest for upgrades to large caps, and largely insignificant for downgrades and recommendations of small caps, despite high abnormal returns. Brokers making profitable recommendations generate abnormally high commission income, recouping much of their clients’ abnormal profits, and their abnormal commission income varies in line with the abnormal profits for their clients. |
| first_indexed | 2024-03-07T07:32:47Z |
| format | Journal article |
| id | oxford-uuid:03d15b1f-451f-42e2-9b2b-6672b7007b40 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T07:32:47Z |
| publishDate | 2019 |
| publisher | Cambridge University Press |
| record_format | dspace |
| spelling | oxford-uuid:03d15b1f-451f-42e2-9b2b-6672b7007b402023-02-09T08:40:48ZMeasuring the added value of stock recommendationsJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:03d15b1f-451f-42e2-9b2b-6672b7007b40EnglishSymplectic Elements at OxfordCambridge University Press2019Anderson, AJones, HMartinez, JVUsing data from the Stockholm Stock Exchange (SSE), we study the value added by (as distinct from the abnormal returns to) analysts’ recommendations. Recommending brokers’ clients trade profitably around positive recommendations at the expense of other brokers’ clients. Significant profits come from transactions before recommendation dates. Value added is greatest for upgrades to large caps, and largely insignificant for downgrades and recommendations of small caps, despite high abnormal returns. Brokers making profitable recommendations generate abnormally high commission income, recouping much of their clients’ abnormal profits, and their abnormal commission income varies in line with the abnormal profits for their clients. |
| spellingShingle | Anderson, A Jones, H Martinez, JV Measuring the added value of stock recommendations |
| title | Measuring the added value of stock recommendations |
| title_full | Measuring the added value of stock recommendations |
| title_fullStr | Measuring the added value of stock recommendations |
| title_full_unstemmed | Measuring the added value of stock recommendations |
| title_short | Measuring the added value of stock recommendations |
| title_sort | measuring the added value of stock recommendations |
| work_keys_str_mv | AT andersona measuringtheaddedvalueofstockrecommendations AT jonesh measuringtheaddedvalueofstockrecommendations AT martinezjv measuringtheaddedvalueofstockrecommendations |