When Wall Street Analysts (Seemingly) Get It Right
Their trade alerts outperform their usual buy/sell recommendations.
Four professors wondered, “Are Analyst Trade Ideas Valuable?” To their pleasure--because null results don’t attract readers--they found the answer to be “Yes.” Wall Street’s stock-trade suggestions have indeed been insightful. Overall, Wall Street’s buy announcements outperformed the norm, by a significant and meaningful amount, while its sell reports trailed by an even larger amount.
(The authors are Justin Birru, Sinan Gokkaya, and Rene Stulz of Ohio State University and Xi Liu of Miami University of Ohio. It’s an Ohio thing.)