Buy-Side Analysts and Earnings Conference Calls

55 Pages Posted: 24 Feb 2016 Last revised: 26 May 2018

See all articles by Michael J. Jung

Michael J. Jung

University of Delaware - Accounting & MIS

M.H. Franco Wong

University of Toronto - Rotman School of Management

Frank Zhang

Yale School of Management

Multiple version iconThere are 3 versions of this paper

Date Written: May 22, 2018

Abstract

Companies’ earnings conference calls are perceived to be venues for sell-side equity analysts to ask management questions. In this study, we examine another important conference call participant — the buy-side analyst — that has been underexplored in the literature due to data limitations. Using a large sample of transcripts, we identify 3,834 buy-side analysts from 701 institutional investment firms that participated (i.e., asked a question) on 13,332 conference calls to examine the determinants and implications of their participation. Buy-side analysts are more likely to participate when sell-side analyst coverage is low and dispersion in sell-side earnings forecasts is high, consistent with buy-side analysts participating when a company’s information environment is poor. Institutional investors trade more of a company’s stock in the quarters in which their buy-side analysts participate on the call. Finally, we find evidence that buy-side analyst participation is associated with company-level absolute changes in future stock price, trading volume, institutional ownership, and short interest.

Keywords: Buy-side analysts, institutional investors, sell-side analysts, earnings conference calls

JEL Classification: G10, G30, M41

Suggested Citation

Jung, Michael J. and Wong, M.H. Franco and Zhang, Frank, Buy-Side Analysts and Earnings Conference Calls (May 22, 2018). Journal of Accounting Research, June 2018, Vol. 56, Issue 3, pp. 913-952.. Available at SSRN: https://ssrn.com/abstract=2736533 or http://dx.doi.org/10.2139/ssrn.2736533

Michael J. Jung (Contact Author)

University of Delaware - Accounting & MIS ( email )

Alfred Lerner College of Business and Economics
Newark, DE 19716
United States

M.H. Franco Wong

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada
416-946-0729 (Phone)

HOME PAGE: http://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Wong.aspx

Frank Zhang

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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