Value Line rank and firm size

Article Abstract:

Value Line Inc's Investment Survey successfully predicts the relationship between stock price changes and the size of a firm. The question explored is whether firm size is the determining factor; the data suggesting that it is not. When size is controlled for, Value Line's ability to predict average relative stock returns is not hampered. It also seems that Value Line is better at predicting small firms' relative returns than those of large firms. This may be due to Value Line's better estimation of small firms' sensitivities to the priced state variables. It may be that small stocks' sensitivities are more dispersed than large stocks.

Analysis, Stock-exchange, Stock exchanges, Surveys, Industry, Industries

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Dividend neutrality with transaction costs

Article Abstract:

An intertemporal model of trade with endogenously established transaction costs is proposed to examine the effect of dividend policy on stockholders' welfare and on stock prices. The model tests the hypothesis that dividend policy affects security prices and investors' welfare if transaction costs are high. Research results do not support the hypothesis and indicate that dividend payments have no effect on stockholders' welfare, which infers an adjustment in investors' optimal portfolios in response to alterations in dividend policy. These adjustments mediate the change in dividend payment despite the transaction costs.

Prices and rates, Stocks, Dividends, Stockholders, Securities, Securities prices, Stock prices

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Market efficiency and Value Line's record

Article Abstract:

The stock return forecasting information provided by Value Line Inc accurately predicts systematic, market-wide factors. The record of Value Line rankings is often interpreted as evidence of market inefficiency. The abnormal returns of positions based on the rankings of Value Line are compensation for the risk associated with those positions.

Management, Stock price forecasting, VALU

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