Professional Stock Analysts’ Recommendations

Implications for Individual Investors

Authors

  • M. Mark Walker Department of Economics and Finance, 301 Conner Hall, University of Mississippi, University, MS 38677.
  • Gay B. Hatfield Department of Economics and Finance, 301 Conner Hall, University of Mississippi, University, MS 38677.

DOI:

https://doi.org/10.1016/S1057-0810(96)90024-4

Abstract

Conclusions regarding analyst performance often depend on the evaluation technique employed. Using a wide variety of techniques, wefind that although there is some evi- dence that analysts do have the ability to identify undervalued and overvalued securities, individual investors generally experience inferior portfolio performance by following analyst recommendations published in the ‘Market Highlights” section of USA Today (even before transaction costs are included). Asaresult,individualinvestorsshouldview studies thatpurport to show superior performance with skepticism. This statement is partitularly true when the assertions are based on stock index comparisons.

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Published

1996-06-30

Issue

Vol. 5 No. 1 (1996): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1996 JAI Press Inc.

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How to Cite

Professional Stock Analysts’ Recommendations: Implications for Individual Investors. (1996). Financial Services Review, 5(1), 13-29. https://doi.org/10.1016/S1057-0810(96)90024-4