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Author: Melvyn Teo Publisher: ISBN: Category : Languages : en Pages : 47
Book Description
How do firms balance their use of management access and investment banking when enticing analysts to bias their reports? Which analysts should investors trust? What are the main determinants of analysts' forecast biases and precisions? This paper develops an infinite-horizon, repeated game to explore these questions. We obtain closed-form solutions which offer new insights and explain recent empirical findings. First, we find that forecast precision is decreasing in the ability of the analyst's corporate finance department and in the flow of investment banking business generated by the firm. Hence, we posit that an analyst makes less precise estimates when she is affiliated with the lead underwriter or when she is covering glamour stocks. Second, we show why an investor with a long horizon should avoid the advice of analysts from reputable brokerages with successful corporate finance departments. This is true even when these analysts have high initial signal precisions. Third, we explain (i) why in the recent years, the biases of analysts in their annual earnings forecasts are increasing in the size of the firms they cover, (ii) why IPO underwriters are chosen based on the strength of their equity research departments, and (iii) why there is greater optimism for glamour stocks than for value stocks. Finally, we predict that the biases will be smaller under the SEC's Regulation Fair Disclosure.
Author: Melvyn Teo Publisher: ISBN: Category : Languages : en Pages : 47
Book Description
How do firms balance their use of management access and investment banking when enticing analysts to bias their reports? Which analysts should investors trust? What are the main determinants of analysts' forecast biases and precisions? This paper develops an infinite-horizon, repeated game to explore these questions. We obtain closed-form solutions which offer new insights and explain recent empirical findings. First, we find that forecast precision is decreasing in the ability of the analyst's corporate finance department and in the flow of investment banking business generated by the firm. Hence, we posit that an analyst makes less precise estimates when she is affiliated with the lead underwriter or when she is covering glamour stocks. Second, we show why an investor with a long horizon should avoid the advice of analysts from reputable brokerages with successful corporate finance departments. This is true even when these analysts have high initial signal precisions. Third, we explain (i) why in the recent years, the biases of analysts in their annual earnings forecasts are increasing in the size of the firms they cover, (ii) why IPO underwriters are chosen based on the strength of their equity research departments, and (iii) why there is greater optimism for glamour stocks than for value stocks. Finally, we predict that the biases will be smaller under the SEC's Regulation Fair Disclosure.
Author: Joshua Ronen Publisher: Springer Science & Business Media ISBN: 0387257713 Category : Business & Economics Languages : en Pages : 587
Book Description
This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?
Author: Oscar Anselm Stolper Publisher: ISBN: Category : Languages : en Pages : 29
Book Description
In order to fulfill their function as information intermediaries in capital markets, sell-side equity analysts regularly issue updated forecasts on the stocks they cover. Quite often, the publication of (revised) analysts' reports is subject to certain trigger events such as the publication of annual figures or the announcement of an upcoming merger. In this exploratory study, we develop a two-step procedure to identify the core events that trigger the release of analysts' reports on companies that constitute the Dow Jones EuroSTOXX50 index during the three-year period from 2004 to 2006. These can be grouped into Financial Disclosures, Corporate Management, Corporate Strategy, Business Activity, Operating Environment and Share. The results suggest that sell-side analysts attach great importance to non-financial information events when transforming their earnings estimates into valuation forecasts and stock recommendations. Additionally, we link the information events identified as reasons of issuance to the summary measures disclosed in the reports in order to investigate the relationship between the report trigger and associated analyst reaction. Our findings indicate that the forecasting activity of sell-side analysts is greatly influenced by forward-looking statements made by management, strategy-related news flow, and non-company-specific information relating to the covered firm's operating environment.
Author: Ben Lourie Publisher: ISBN: Category : Languages : en Pages : 61
Book Description
Equity analysts are often hired by firms they cover. I document the extent to which this revolving door phenomenon impairs analysts' independence. I do this by examining the presence of biased research reports issued during the year before analysts are employed by a firm they cover. I find that during their final year, revolving door analysts bias their EPS forecasts, their target prices, and their recommendations in a direction that suggests that they are attempting to gain favor from their prospective employers. Specifically, relative to other analysts, revolving door analysts issue more optimistic reports on the firms that hire them, and they issue more pessimistic reports on firms that do not hire them. These results suggest the presence of strategic bias, although more innocuous interpretations cannot be completely ruled out.
Author: Brian R. Brown Publisher: John Wiley & Sons ISBN: 1118580443 Category : Business & Economics Languages : en Pages : 209
Book Description
Conventional wisdom suggests that markets are efficient, random walks and that stock prices rise and fall with the fundamentals of the company. How then have black-box traders prospered and how do they exploit market inefficiencies? Are their strategies on their last legs or will they adapt to the new landscape amidst the global financial crisis? Chasing the Same Signals is a unique chronicle of the black-box industry's rise to prominence and their influence on the market place. This is not a story about what signals they chase, but rather a story on how they chase and compete for the same signals
Author: Boris Groysberg Publisher: Stanford University Press ISBN: 0804787123 Category : Business & Economics Languages : en Pages : 200
Book Description
Wall Street Research: Past, Present, and Future provides a timely account of the dramatic evolution of Wall Street research, examining its rise, fall, and reemergence. Despite regulatory, technological, and global forces that have transformed equity research in the last ten years, the industry has proven to be remarkably resilient and consistent. Boris Groysberg and Paul M. Healy get to the heart of Wall Street research—the analysts engaged in the process—and demonstrate how the analysts' roles have evolved, what drives their performance today, and how they stack up against their buy-side counterparts. The book unpacks key trends and describes how different firms have coped with shifting pressures. It concludes with an assessment of where equity research is headed in emerging markets, drawing conclusions about this often overlooked corner of Wall Street and the industry's future challenges.
Author: Gillian D. Elcock Publisher: Ecademy Press ISBN: 1905823932 Category : Business & Economics Languages : en Pages : 166
Book Description
An experienced equity research analyst guides jobseekers every step along the way, from choosing which companies to target, to mastering the specialized interview process, in order to stand out from the pack.
Author: Bernd W. Wirtz Publisher: Springer Nature ISBN: 3030480178 Category : Business & Economics Languages : en Pages : 311
Book Description
“How are business models purposeful designed and structured? How can the models be implemented professionally and managed successfully and sustainably? In what ways can existing business models be adapted to the constantly changing conditions? In this clearly structured reference work, Bernd W. Wirtz gives an answer to all these issues and provides the reader with helpful guidance. Although, ‘Business Model Management’ is first and foremost a scientific reference book, which comprehensively addresses the theory of business models, with his book Bernd W. Wirtz also turns to practitioners. Not least, the many clearly analyzed case studies of companies in different industries contribute to this practical relevance. My conclusion: ‘Business Model Management’ is an informative and worthwhile read, both for students of business administration as a textbook as well as for experienced strategists and decision makers in the company as a fact-rich, practical compendium.” Matthias Müller, Chief Executive Officer Porsche AG (2010-2015), Chief Executive Officer (2015-2018) Volkswagen AG “In dynamic and complex markets a well thought out business model can be a critical factor for the success of a company. Bernd Wirtz vividly conveys how business models can be employed for strategic competition and success analysis. He structures and explains the major theoretical approaches in the literature and practical solutions in an easy and understandable way. Numerous examples from business practice highlight the importance of business models in the context of strategic management. The book has the potential to become a benchmark on the topic business models in the German-speaking world.” Hermann-Josef Lamberti, Member of the Board Deutsche Bank AG 1999-2012/ Member of the Board of Directors, Airbus Group “The business environment has become increasingly complex. Due to changing conditions, the executive board of a company is confronted with growing challenges and increasing uncertainty. Thus, a holistic understanding of the corporate production and performance systems is becoming more and more important. At this point, Bernd W. Wirtz introduces and presents the concept of the structured discussion of the own business model. Business models present operational service processes in aggregated form. This holistic approach channels the attention of management, supports a sound understanding of relationships and facilitates the adaption of the business to changing conditions. The management of business models is thus an integrated management concept. Through the conceptual presentation of complex issues the author makes a valuable contribution to the current literature. In particular, the referenced case studies from various industries make the book clear and very applicable to practice.” Dr. Lothar Steinebach, Member of the Board, Henkel AG 2007-2012/ Supervisory Board, ThyssenKrupp AG
Author: Dr. Preeti Singh Publisher: Blue Rose Publishers ISBN: Category : Business & Economics Languages : en Pages : 208
Book Description
Welcome to this concise and comprehensive textbook on the essentials of economics, specifically tailored for MBA and BBA students. As an academician, I have crafted this resource to provide you with a clear understanding of key economic concepts that are crucial for your future career success. In the following pages, we will explore topics such as demand analysis, microeconomics, macroeconomics, forecasting techniques, pricing strategies, different policies, and profit management. These subjects are vital for your comprehension of business dynamics and decision-making. With a focus on practical application, this book combines theoretical explanations, real-world examples, and case studies to bridge the gap between theory and practice. Visual aids, including charts and graphs, have been included to enhance your understanding and engagement. By studying this book, you will gain the knowledge and analytical skills necessary to navigate the complexities of economics and make informed decisions in your professional endeavors. I am confident that this resource will serve as a valuable companion throughout your academic journey, equipping you with a solid foundation in economics and empowering you to excel in the dynamic world of business.
Author: Melvyn Teo
Author: Melvyn Teo
Author: Joshua Ronen
Author: United States. Congress. Senate. Committee on Governmental Affairs
Author: Oscar Anselm Stolper
Author: Ben Lourie
Author: Brian R. Brown
Author: Boris Groysberg
Author: Gillian D. Elcock
Author: Bernd W. Wirtz
Author: Dr. Preeti Singh