Analyst Recommendations and Stock Price Momentum

38 Pages Posted: 12 Mar 2012

See all articles by Keming Li

Keming Li

Texas A&M University (TAMU) - San Antonio

Larry J. Lockwood

Texas Christian University

Mohammad Riaz Uddin

Marshall University - Lewis College of Business

Date Written: March 10, 2012

Abstract

This paper examines the role of sell-side security analysts in the stock price momentum phenomenon. We employ an indirect method that mitigates the “piggy-backing” effect to test the role of analysts. Our findings indicate that analyst recommendations are positively influenced by the momentum characteristics of stocks, that there is no momentum for neglected stocks, and, most importantly, that analysts cause momentum. The findings hold up to various robustness checks.

Keywords: Analyst recommendation, Covered stocks, Neglected stocks, Parallel projection, Firm Fundamentals, Momentum

JEL Classification: G1, G14, G24

Suggested Citation

Li, Keming and Lockwood, Larry J. and Uddin, Mohammad Riaz, Analyst Recommendations and Stock Price Momentum (March 10, 2012). Available at SSRN: https://ssrn.com/abstract=2019729 or http://dx.doi.org/10.2139/ssrn.2019729

Keming Li

Texas A&M University (TAMU) - San Antonio ( email )

One University Way
San Antonio, TX 78224
United States

Larry J. Lockwood

Texas Christian University ( email )

Fort Worth, TX 76129
United States
817-921-7420 (Phone)
817-921-7227 (Fax)

Mohammad Riaz Uddin (Contact Author)

Marshall University - Lewis College of Business ( email )

400 Hal Greer Boulevard
Huntington, WV 25755
United States

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