Does Analyst Stock Ownership Affect Reporting Behavior?

40 Pages Posted: 14 Nov 2006 Last revised: 27 Jan 2009

See all articles by Rick Johnston

Rick Johnston

affiliation not provided to SSRN

Date Written: January 27, 2009


An analyst who owns stock in the company she covers may be tempted to protect or enhance her personal interests. I examine how this conflict of interest affects the reporting of sell-side analysts. I identify and collect two samples, the first from SEC Form 144 filings, and the second from voluntary ownership disclosures. Ordered probit analyses show that owning-analyst recommendations are slightly more cautious than those of the control analysts but returns tests suggest the market generally does not react differentially to the two groups. I find little robust evidence that stock ownership leads to optimistic analyst reporting, however I do find that analysts who are consistently optimistic are owners.

Keywords: Analyst, Incentives, Form 144, Stock ownership, Capital Markets

JEL Classification: G24, G29, D82, D84

Suggested Citation

Johnston, Rick M., Does Analyst Stock Ownership Affect Reporting Behavior? (January 27, 2009). Available at SSRN: or

Rick M. Johnston (Contact Author)

affiliation not provided to SSRN

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