Do Analysts Provide Value‐Added Information to Private Investors? ‐ An Event Study On Analysts´ Recommendations concerning the Danish Stock Market

Júlíus Fjeldsted

Útdráttur


The study analysed the price behaviour of stocks recorded under Børsens Aktiepanel in the Danish business magazine Børsen. These stocks make up the components of the KFXindex, which serves as the main index for the Danish stock market. No significant abnormal return was observed during the 6‐day event period when either a new ʺstrong buyʺ or a new ʺsellʺ recommendation was published. Significant positive abnormal returns were noticed in the post‐sell recommendation period. At the same time the KFX index yielded a positive return. This means that analysts´ recommendations concerning the observed stocks surrounding the event day did not seem to offer any value to investors. ʺSellʺ recommendations served as contrarian signals in the long term. ʺBuyʺ recommendations never offered any value in excess of market index return. According to the results of this study, analysts on the Danish market do not have timing abilities.

Efnisorð


Analysts; stock recommendations; contrarian signal; abnormal returns.

Heildartexti:

PDF (English)

JEL


C12; C22; G20


DOI: https://doi.org/10.24122/tve.a.2005.3.1.4

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