Are Analyst “Top Picks” Informative?
Abstract Following the Global Settlement, analysts extensively use a top pick designation allowing for greater granularity of information among buy recommended stocks, but conflicts of interest can potentially influence this designation. Examining a novel sample of top picks, we find that a calendar...
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| Veröffentlicht in: | The Review of financial studies 2024-05, Vol.37 (5), p.1538-1583 |
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| container_title | The Review of financial studies |
| container_volume | 37 |
| creator | Birru, Justin Gokkaya, Sinan Liu, Xi Stulz, René |
| description | Abstract
Following the Global Settlement, analysts extensively use a top pick designation allowing for greater granularity of information among buy recommended stocks, but conflicts of interest can potentially influence this designation. Examining a novel sample of top picks, we find that a calendar-time portfolio of top picks generates an abnormal performance of 17.6% per year. Top picks have greater investment value than do buy recommendations and alternative analyst investment strategies. Both institutional and retail investors trade in response to top picks. However, only institutional investors appear to identify top picks that have greater investment value when they are announced. |
| doi_str_mv | 10.1093/rfs/hhad099 |
| format | Article |
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Following the Global Settlement, analysts extensively use a top pick designation allowing for greater granularity of information among buy recommended stocks, but conflicts of interest can potentially influence this designation. Examining a novel sample of top picks, we find that a calendar-time portfolio of top picks generates an abnormal performance of 17.6% per year. Top picks have greater investment value than do buy recommendations and alternative analyst investment strategies. Both institutional and retail investors trade in response to top picks. However, only institutional investors appear to identify top picks that have greater investment value when they are announced.</description><identifier>ISSN: 0893-9454</identifier><identifier>EISSN: 1465-7368</identifier><identifier>DOI: 10.1093/rfs/hhad099</identifier><language>eng</language><publisher>Oxford University Press</publisher><subject>1999-2016 ; Anlageverhalten ; Finanzanalyse ; Information ; Ranking-Verfahren ; USA ; Wertpapier</subject><ispartof>The Review of financial studies, 2024-05, Vol.37 (5), p.1538-1583</ispartof><rights>The Author(s) 2024. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. [br]For permissions, please e-mail: journals.permissions@oup.com. 2024</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><cites>FETCH-LOGICAL-c312t-598cab38188ffad5fb372abf87f3aa867b7e123a92ff652e8a496f688fb373f03</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>314,780,784,1583,27923,27924</link.rule.ids></links><search><contributor>Cohen, Lauren</contributor><creatorcontrib>Birru, Justin</creatorcontrib><creatorcontrib>Gokkaya, Sinan</creatorcontrib><creatorcontrib>Liu, Xi</creatorcontrib><creatorcontrib>Stulz, René</creatorcontrib><title>Are Analyst “Top Picks” Informative?</title><title>The Review of financial studies</title><description>Abstract
Following the Global Settlement, analysts extensively use a top pick designation allowing for greater granularity of information among buy recommended stocks, but conflicts of interest can potentially influence this designation. Examining a novel sample of top picks, we find that a calendar-time portfolio of top picks generates an abnormal performance of 17.6% per year. Top picks have greater investment value than do buy recommendations and alternative analyst investment strategies. Both institutional and retail investors trade in response to top picks. However, only institutional investors appear to identify top picks that have greater investment value when they are announced.</description><subject>1999-2016</subject><subject>Anlageverhalten</subject><subject>Finanzanalyse</subject><subject>Information</subject><subject>Ranking-Verfahren</subject><subject>USA</subject><subject>Wertpapier</subject><issn>0893-9454</issn><issn>1465-7368</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2024</creationdate><recordtype>article</recordtype><recordid>eNp9z8FKw0AUheFBFIzVlS-QlQgSO5OZTO6sJJSqhYIu6jrcpHNptE3CTBS664Poy_VJTEnBnauz-TjwM3Yt-L3gRo4d-fFqhUtuzAkLhNJJlEoNpyzgYGRkVKLO2YX375xzIRUP2G3mbJjVuN76LtzvvhdNG75W5Yff737CWU2N22BXfdmHS3ZGuPb26rgj9vY4XUyeo_nL02ySzaNSiriLEgMlFhIEABEuEypkGmNBkJJEBJ0WqRWxRBMT6SS2gMpo0r3uoSQuR-xu-C1d472zlLeu2qDb5oLnh8i8j8yPkb0OB23Lpq78nwUA1Wt1IDcDaT7bf79-AQlaXrA</recordid><startdate>20240501</startdate><enddate>20240501</enddate><creator>Birru, Justin</creator><creator>Gokkaya, Sinan</creator><creator>Liu, Xi</creator><creator>Stulz, René</creator><general>Oxford University Press</general><scope>OQ6</scope><scope>AAYXX</scope><scope>CITATION</scope></search><sort><creationdate>20240501</creationdate><title>Are Analyst “Top Picks” Informative?</title><author>Birru, Justin ; Gokkaya, Sinan ; Liu, Xi ; Stulz, René</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c312t-598cab38188ffad5fb372abf87f3aa867b7e123a92ff652e8a496f688fb373f03</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2024</creationdate><topic>1999-2016</topic><topic>Anlageverhalten</topic><topic>Finanzanalyse</topic><topic>Information</topic><topic>Ranking-Verfahren</topic><topic>USA</topic><topic>Wertpapier</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Birru, Justin</creatorcontrib><creatorcontrib>Gokkaya, Sinan</creatorcontrib><creatorcontrib>Liu, Xi</creatorcontrib><creatorcontrib>Stulz, René</creatorcontrib><collection>ECONIS</collection><collection>CrossRef</collection><jtitle>The Review of financial studies</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Birru, Justin</au><au>Gokkaya, Sinan</au><au>Liu, Xi</au><au>Stulz, René</au><au>Cohen, Lauren</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Are Analyst “Top Picks” Informative?</atitle><jtitle>The Review of financial studies</jtitle><date>2024-05-01</date><risdate>2024</risdate><volume>37</volume><issue>5</issue><spage>1538</spage><epage>1583</epage><pages>1538-1583</pages><issn>0893-9454</issn><eissn>1465-7368</eissn><abstract>Abstract
Following the Global Settlement, analysts extensively use a top pick designation allowing for greater granularity of information among buy recommended stocks, but conflicts of interest can potentially influence this designation. Examining a novel sample of top picks, we find that a calendar-time portfolio of top picks generates an abnormal performance of 17.6% per year. Top picks have greater investment value than do buy recommendations and alternative analyst investment strategies. Both institutional and retail investors trade in response to top picks. However, only institutional investors appear to identify top picks that have greater investment value when they are announced.</abstract><pub>Oxford University Press</pub><doi>10.1093/rfs/hhad099</doi><tpages>46</tpages></addata></record> |
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| subjects | 1999-2016 Anlageverhalten Finanzanalyse Information Ranking-Verfahren USA Wertpapier |
| title | Are Analyst “Top Picks” Informative? |
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