Analyst Tipping: Additional Evidence
Journal of Business Finance & Accounting 44 (2017), 94-115.
36 Pages Posted: 20 May 2011 Last revised: 11 May 2020
Date Written: October 28, 2016
We examine whether analysts tip investors during investor conferences. We find that conference-day abnormal returns of a presenting company are about 0.6% higher when the conference is hosted by an analyst who will initiate coverage with a Buy recommendation than when the conference is hosted by non-initiating analysts. Furthermore, conference-day abnormal returns of the presenting company amount to half of the price run-up during the twenty trading days prior to the Buy initiation. Finally, there is a statistically and economically significant price run-up prior to a Sell initiation (by about -0.7%) when the analyst who will initiate coverage with a Sell recommendation hosts a conference but does not invite the company to present. Our findings collectively suggest that analysts, rather than companies, tip select investors about upcoming initiations during conferences.
Keywords: information leakage, equity analysts, investor conferences
JEL Classification: G11, G18, G24
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Can Investors Profit from the Prophets? Consensus Analyst Recommendations and Stock Returns
By Brad M. Barber, Reuven Lehavy, ...
Security Analysts' Career Concerns and Herding of Earnings Forecasts
By Jeffrey D. Kubik, Amit Solomon, ...
The Relation between Analysts' Forecasts of Long-Term Earnings Growth and Stock Price Performance Following Equity Offerings
By Patricia Dechow, Amy P. Hutton, ...
Analyzing the Analysts: When Do Recommendations Add Value?
By Narasimhan Jegadeesh, Joonghyuk Kim, ...
Herding Among Investment Newsletters: Theory and Evidence
An Empirical Analysis of Analysts' Target Prices: Short Term Informativeness and Long Term Dynamics
By Alon Brav and Reuven Lehavy
How Do Analysts Use Their Earnings Forecasts in Generating Stock Recommendations?
Are Small Investors Naive About Incentives?
Are Investors Naive About Incentives?
Analyst Forecast Revisions and Market Price Formation