Analyst Forecasts in New Zealand

This study explores analyst annual earnings forecasts in New Zealand. The results show that forecasts of New Zealand firms do not suffer from the pessimistic biases found in studies of forecasts for United States firms. Similar to United States studies, however, loss firm forecasts are significantly less accurate and more optimistic. These results suggest that New Zealand firms do not tend to manage earnings to beat expectations, but poorly performing firms might attempt to deceive investors by decreasing the quality of their information environment. Furthermore, optimism does appear to be impounded in stock prices, as firms with optimistic forecasts underperform firms with pessimistic forecasts by about 30%

A Month-by-Month Examination of Long-Term Stock Returns

This study provides a month-by-month examination of stock returns. The results reconfirm the January Effect as well as indicate a powerful anomaly in September. Investing in the CRSP equal-weighted index in only January turns $1 in 1926 to$87.40 by 2006. The second closest month is July, during which $1 grows to$3.11. September is a poor month to invest. The $1 invested in only September decreases to a mere$0.49. The Halloween Effect vanishes once the monthly anomalies are controlled for. The September Effect is also established in four out of the five international markets tested

Piety and Profits: Stock Market Anomaly during the Muslim Holy Month

Observed by more than 1.5 billion Muslims, Ramadan is one of the most celebrated religious rituals in the world. We investigate stock returns during Ramadan for 14 predominantly Muslim countries over the years 1989-2007. The results show that stock returns during Ramadan are almost nine times higher and less volatile than during the rest of the year. No discernible difference in trading volume is recorded. We find these results consistent with a notion that Ramadan positively affects investor psychology, as it promotes feelings of solidarity and social identity among Muslims world-wide, leading to optimistic beliefs that extend to investment decisions.Ramadan Effect; Behavioral Finance; Market Efficiency; Religion

Employees, Firm Size and Profitability of U.S. Manufacturing Industries

We examine the relation between firm size and profitability within 109 SIC four-digit manufacturing industries. Depending on our measure of profitability, we find that profitability increases at a decreasing rate and eventually declines in up to 47 of our industries. No relation between profitability and size is found in up to 52 of our industries. These two categories account for 97 of our 109 industries. Profitability continues to increase as firms become larger in up to 11 industries. Hence, the relation between size and profitability is industry specific. But, regardless of the shape of the size profitability function, we find that profitability is negatively correlated with the number of employees for firms of a given size measured in terms of total assets and sales. These results are puzzling in the context of work by others who report that common stock returns are negatively correlated with size when size is measured by the market value of a company or with the work of those who argue that size is a proxy for risk. Interpreted against these works, our findings may mean that large firms earn excess returns, that small firms fail to earn their cost of capital, or that accounting returns simply behave differently than market returns with respect to firm size

An assessment of the stock market effects of proposed accounting changes in the oil and gas industry

This dissertation research addresses the question of whether the issuance of the FASB and SEC proposals had any effect on the common stock values of oil and gas producers. Of primary interest is a determination of the differential impact of these proposals on stock values of full-cost versus successful efforts firms

A month-by-month examination of long-term stock returns

This study provides a month-by-month examination of stock returns. The results reconfirm the January Effect as well as indicate a powerful anomaly in September. Investing in the CRSP equal-weighted index in only January turns $1 in 1926 to$87.40 by 2006. The second closest month is July, during which $1 grows to$3.11. September is a poor month to invest. The $1 invested in only September decreases to a mere$0.49. The Halloween Effect vanishes once the monthly anomalies are controlled for. The September Effect is also established in four out of the five international markets tested

Analyst Forecasts in New Zealand

This study explores analyst annual earnings forecasts in New Zealand. The results show that forecasts of New Zealand firms do not suffer from the pessimistic biases found in studies of forecasts for United States firms. Similar to United States studies, however, loss firm forecasts are significantly less accurate and more optimistic. These results suggest that New Zealand firms do not tend to manage earnings to beat expectations, but poorly performing firms might attempt to deceive investors by decreasing the quality of their information environment. Furthermore, optimism does appear to be impounded in stock prices, as firms with optimistic forecasts underperform firms with pessimistic forecasts by about 30%

Employees, firm size and profitability in U.S. manufacturing industries

We examine the relation between firm size and profitability within 109 SIC four-digit manufacturing industries. Depending on our measure of profitability, we find that profitability increases at a decreasing rate and eventually declines in up to 47 of our industries. No relation between profitability and size is found in up to 52 of our industries. These two categories account for 97 of our 109 industries. Profitability continues to increase as firms become larger in up to 11 industries. Hence, the relation between size and profitability is industry specific. But, regardless of the shape of the size profitability function, we find that profitability is negatively correlated with the number of employees for firms of a given size measured in terms of total assets and sales. These results are puzzling in the context of work by others who report that common stock returns are negatively correlated with size when size is measured by the market value of a company or with the work of those who argue that size is a proxy for risk. Interpreted against these works, our findings may mean that large firms earn excess returns, that small firms fail to earn their cost of capital, or that accounting returns simply behave differently than market returns with respect to firm size