Analysts’ Recommendations in Brazil: Do They Add Value?

17 Pages Posted: 19 Jul 2009  

William Eid Jr.

Getulio Vargas Foundation (FGV)

Ricardo R. Rochman

FGV-EESP

Date Written: July 17, 2009

Abstract

This paper examines the value of analysts’ recommendations in Brazilian Stock Market. We studied a sample of 294 weeks of recommendations make public by the best seller newspaper in Brazil with six different investment strategies and time horizons. The main conclusion is that it is possible to beat the Brazilian market indexes Ibovespa and IBrX following the analysts’ stock recommendations. The best strategies are buying only the recommended stocks, buying the recommended stocks whose target and market prices difference is bigger than 25% and lesser or equal than 50%. The performance of the six strategies is analyzed through the use of bootstrap and Monte Carlo techniques.

Keywords: Brazil, Stock Market, analyst, recommendation

JEL Classification: G00

Suggested Citation

Eid Jr., William and Rochman, Ricardo R., Analysts’ Recommendations in Brazil: Do They Add Value? (July 17, 2009). Available at SSRN: https://ssrn.com/abstract=1435302 or http://dx.doi.org/10.2139/ssrn.1435302

William Eid Jr. (Contact Author)

Getulio Vargas Foundation (FGV) ( email )

Rua Itapeva 474 9 andar
Rio de Janeiro, 01332-000
Brazil

Ricardo R. Rochman

FGV-EESP ( email )

Rua Itapeva 474 9 andar
Rio de Janeiro, 01332-000
Brazil

HOME PAGE: http://www.fgv.br

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