Publication Type

Conference Paper

Publication Date

7-2010

Abstract

We study analysts’ industry recommendations. We find that the distribution of industry recommendations is quite balanced. Analysts show more optimism towards industries with high levels of R&D, past profitability and past returns. Industry recommendations possess investment value as portfolios based on these recommendations generate risk-adjusted abnormal returns. Finally, industry recommendations contain information which is orthogonal to that included in firm recommendations, and more so for brokers who benchmark their firm recommendations to industry peers. Consequently, the investment value of analysts’ recommendations is enhanced when both industry and firm recommendations are used.

Keywords

Industry recommendation, Analysts, Market Efficiency, Financial analysts, Stock Recommendations, Industry Analysis

Discipline

Corporate Finance | Portfolio and Security Analysis

Research Areas

Finance

Publication

China International Conference in Finance, Beijing, 4-7 July 2010

City or Country

Beijing, China

Comments

Also presented at 2009 FEA Conference, 2010 AFA Meeting, 2010 FARS Conference, 2010 FIRS Conference

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