Open AccessBook
Individual Forecasting Ability
Patricia C. O'Brien
- 10 Sep 2018
35
TL;DR: In this paper, the authors explore the question of individual superiority by examining one aspect of analysts' services: earnings forecasting, which is of interest to investors as inputs to investment decisions, and also to researchers, as data on earnings expectations.
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Abstract: Are some analysts ‘superstars’? Financial press coverage of analysts' performance suggests that there are superior financial analysts. One example of this coverage is the Institutional Investor ‘All American Research Team’, based on surveys of money managers, who nominate and rank analysts. In this paper, I explore the question of individual superiority by examining one aspect of analysts' services: earnings forecasting. Forecasts of future earnings are of interest to investors, as inputs to investment decisions, and also to researchers, as data on earnings expectations.
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Citations
Capital Markets Research in Accounting
TL;DR: This paper reviewed empirical research on the relation between capital markets and financial statements and found that the principal sources of demand for capital markets research in accounting are fundamental analysis and valuation, tests of market efficiency, and the role of accounting numbers in contracts and the political process.
1.8K
•Journal Article
Using analysts' forecasts to measure properties of analysts' information environment
TL;DR: In this article, the authors present a model that relates properties of the analysts' information environment to the properties of their forecasts, and show that the quality of common and private information available to analysts can be measured using these same observable variables.
Forecast accuracy of individual analysts in nine industries
TL;DR: In this article, the authors investigate whether financial analysts with superior earnings forecasting ability can be distinguished on the basis of ex post forecast accuracy, and explore the question by estimating and comparing average accuracy across individuals, and by considering whether the observed distribution of analyst forecast accuracies differs from the distribution expected if their relative performances each year were purely random.
The Association between the Legal and Financial Reporting Environments and Forecast Performance of Individual Analysts
TL;DR: In this paper, the ability of analyst characteristics to explain relative forecast accuracy across legal origins (common law versus civil law) was tested and it was shown that analysts with superior ability and resources in common-law countries will more consistently outperform their peers because appropriate market-based incentives exist.
133
•Posted Content
The Association Between the Legal and Financial Reporting Environments and Forecast Performance of Individual Analysts
TL;DR: In this article, the ability of analyst characteristics to explain relative forecast accuracy across legal origins (common law versus civil law) was tested and it was found that analysts with superior ability and resources in common law countries will more consistently outperform their peers because appropriate market-based incentives exist.
117
References
•Book
Analyst's forecasts as earnings expectations
Patricia C. O'Brien
- 16 Aug 2011
TL;DR: This paper examined three composite analyst forecast of earnings per share as proxies for expected earnings and found that the most current forecast weakly dominates the mean and median forecasts in accuracy, and that forecast dates are more relevant for determining accuracy than individual error.
The intraday speed of adjustment of stock prices to earnings and dividend announcements
James M. Patell,Mark A. Wolfson +1 more
TL;DR: This article examined the effects of Broad Tape news releases of earnings and dividend announcements on three aspects of intraday stock price behavior: mean returns, return variance, and serial correlation in consecutive price changes.
489
•Posted Content
The Superiority of Analyst Forecasts as Measures of Expectations: Evidence from Earnings
TL;DR: The authors found that Box-Jenkins time series models consistently produce better forecasts than martingale and submartingale earnings models; but Value Line Investment Survey consistently makes significantly better earnings forecasts than the Box-jenkins models.
465
The superiority of analyst forecasts as measures of expectations: evidence from earnings
TL;DR: This article found that Box-Jenkins time series models consistently produce better forecasts than martingale and submartingale earnings models; but Value Line Investment Survey consistently makes significantly better earnings forecasts than the Box-jenkins models.
463