Stock price response to analyst recommendations in the Wall Street Journal “Heard on the Street” column are examined for their usefulness in short-term trade decision making. The stock price response relation to firm size is also examined. Information from the column appears to produce statistically significant but economically insignificant stock price movements. Firm size is important only for negative comments in the column.
Get full access to this article
View all access options for this article.
References
1.
AtiaseRowland K.“Predisclosure Information, Firm Capitalization, and Security Price Behavior Around Earnings Announcements.”Journal of Accounting Research (Spring 1985), pp. 21–36.
2.
BamberLinda S.“The Information Content of Annual Earnings Releases: A Trading Volume Approach.”Journal of Accounting Research (Spring 1986), pp. 40–56.
3.
BanzRolf W.“The Relationship Between Return and Market Value of Common Stocks.”Journal of Financial Economics (March 1981), pp. 3–18.
4.
BjerringJames H.LakonishokJosefVermaelenTheo“Stock Prices and Financial Analysts' Recommendations.”Journal of Finance (March 1983), pp. 187–204.
5.
BrownStephen J.WarnerJerold B.“Using Daily Stock Returns: The Case of Event Studies.”Journal of Financial Economics (1985), pp. 205–258.
6.
DaviesPeter LloydCanesMichael“Stock Prices and the Publication of Second-Hand Information.”Journal of Business (January 1978), pp. 43–56.
7.
DiefenbachR. E.“How Good Is Institutional Brokerage Research?”Financial Analysts Journal (January-February 1972), pp. 54–60.
8.
DimsonElroyMarshPaul“Event Study Methodologies and the Size Effect: The Case of UK Press Recommendations.”Journal of Financial Economics (1986), pp. 113–142.
9.
DoddP.WarnerJerold“On Corporate Governance: A Study of Proxy Contests.”Journal of Financial Economics (April 1983), pp. 401–438.
10.
FreemanRobert N.“The Association Between Accounting Earnings and Security Returns for Large and Small Firms.”Journal of Accounting and Economics (1987), pp. 195–228.
11.
GlascockJohn L.HendersonGlenn V.Jr.MartinLinda L.“When E. F. Hutton Talks.”Financial Analysts Journal (May-June 1986), pp. 69–72.
12.
Ibbotson, Roger and Rex Sinquefield. Bonds, Bills and Inflation: The Past and the Future.Charlottesville, VA: The Financial Analysts Research Foundation, 1982.
13.
KeimDonald B.“Size Related Anomalies and Stock Return Seasonality: Further Empirical Evidence.”Journal of Financial Economics (March 1983), pp. 13–32.
14.
LeeChi-Wen J.“Information Content of Financial Columns.”Journal of Economics and Business (1986), pp. 27–39.
15.
LogueDennisTuttleDonald“Brokerage House Investment Advice.”Financial Review (February 1973), pp. 38–54.
16.
ReinganumMarc“Misspecifiaction of Capital Asset Pricing: Empirical Anomalies Based on Earnings' Yields and Market Values.”Journal of Financial Economics (March 1981), pp. 19–46.
17.
ReinganumMarc“The Anomalous Stock Market Behavior of Small Firms in January: Empirical Tests for Tax-Loss Selling Effects.”Journal of Financial Economics (March 1983), pp. 89–104.
18.
RitterJay R.“The Buying and Selling Behavior of Individual Investors at the Turn of the Year.”Journal of Finance (July 1988), pp. 701–717.
19.
RozeffMichael S.KinneyWilliam“Capital Market Seasonality: The Case of Stock Returns.”Journal of Financial Economics (October 1976), pp. 379–402.
20.
ThompsonRobert B.IIOlsenChrisDietrichRichard J.“Attributes of News About Firms: An Analysis of Firm-Specific News Reported in the Wall Street Journal Index.”Journal of Accounting Research (Autumn 1987), pp. 245–274.
21.
ZivneyTerry L.ThompsonDonald J.“Relative Stock Prices and the Firm Size Effect.”Journal of Financial Research (Summer 1987), pp. 99–109.