Do Sell-Side Analysts Say Buy While Whispering Sell?

61 Pages Posted: 5 Sep 2019 Last revised: 13 Sep 2019

See all articles by Yushui Shi

Yushui Shi

University of California, Irvine - Paul Merage School of Business

Date Written: July 29, 2019


We investigate whether sell-side stock analysts disclose different information to mutual fund managers than to the public. We focus on one specific identifiable phenomenon that analysts tell the public to buy while whispering fund managers to sell. We measure the likelihood of such behaviors based upon the percentage of managers’ selling stocks that analysts recommend to buy. Using mutual fund managers voting for sell-side analysts in a Chinese “star analyst” competition as a proxy for managers’ evaluations of analysts, we find that managers are more likely to vote for the analysts who exhibit more say-buy-whisper-sell behaviors with these managers. The positive relationship between the managers’ voting and the analysts’ say-buy-whisper-sell behaviors supports our hypothesis that analysts provide private information to fund managers. In contrast, an alternative hypothesis where managers and analysts respond independently to common market information predicts a negative relationship. Consistent with fund managers receiving precise information from analysts, we find that, among analysts’ buy recommendations, stocks sold by the connected managers — who vote for the analysts — underperform stocks bought by these managers. Moreover, the stocks sold by the connected managers still have positive abnormal returns on the recommendation dates, but followed by negative abnormal returns, suggesting a form of information asymmetry caused by analysts’ differential disclosure behaviors.

Keywords: Analyst Recommendations; Mutual Fund; Private Information Communication

JEL Classification: G00, G23, L15

Suggested Citation

Shi, Yushui, Do Sell-Side Analysts Say Buy While Whispering Sell? (July 29, 2019). Available at SSRN: or

Yushui Shi (Contact Author)

University of California, Irvine - Paul Merage School of Business ( email )

Irvine, CA California 92697-3125
United States

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