The Impact of "Barron's" Recommendations on Stock Prices

We examine the impact on stock prices of purchase recommendations published in the popular financial weekly, Barron's. The results show that the publication of this second-hand information has a positive and significant impact on stock prices at the time of publication. The abnormal returns quickly dissipate and the recommendations examined here do not provide superior returns over longer holding periods. The abnormal returns are related inversely to firm size. Overall, these findings expand the literature on the impact of second-hand information and show results consistent with prior studies of other sources of this type of information.