Earnings expectations: the analysts' information advantage

Article Abstract:

A time-series model was used to conduct research into the association between the superiority of analysts' earnings forecasts and the characteristics of the analysts' firms. Variables taken into consideration by the model were past earnings viability, coverage in the Wall Street Journal, the market value of firms' stock, firms' number of business lines, and the release of earnings. Research results reveal that the information advantage of analysts is related to the private information gathering activities and the amount of information disseminated by the analysts' firm. Research also indicates that analyst advantage is positively related to coverage in The Wall Street Journal, earnings variability, and timing advantages related to historical variability in the earnings time series. However, there is no positive correlation between analyst advantage and firms' size and number of business lines.

Dividends

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Cue usage and self-insight of financial analysts

Article Abstract:

In an experiment, practicing financial analysts provided risk and return judgments on 30 equity securities. Three optional measurement methods were used to assess the ability of the analysts to express subjectively the relative weight they place on available cues when they generate their judgment evaluations. Results suggest that the analysts show a relatively strong degree of self-insight since their subjective indications of cue importance were consistent with judgment policy outputs and models.

Analysis, Usage, Judgment, Judgment (Psychology), Insight

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Analysts' forecasts, earnings variability, and option pricing: empirical evidence

Article Abstract:

The disagreement among financial analysts and the variance in their forecasts is useful as a predictor of the market's uncertainty regarding a future earnings signal. Research tested for an association between forecast variance and the ex post magnitude and ex post variance of returns, and the average variance of return to maturity.

Economic forecasting, Uncertainty

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