Returns to buying upward revision and selling downward revision stocks: evidence from Canada.

Purpose: The purpose of this paper is to investigate the role of earnings forecast revisions by equity analysts in predicting Canadian stock returns Design/methodology/approach: The sample covers 420 Canadian firms over the period 1998-2009. It analyses investors’ reactions to 27,271 upward revisions and 32,005 downward revisions of analysts’ forecasts for Canadian quoted companies. To test whether analysts’ earnings forecast revisions affect stock return continuation, forecast revision portfolios similar to Jegadeesh and Titman (2001) are constructed. The paper analyses the returns gained from a trading strategy based on buying the strong upward revisions portfolio and short selling the strong downward revisions portfolio. It also separates the sample into upward and downward revisions. Findings: The authors find that new information in the form of analyst forecast revisions is not impounded efficiently into stock prices. Significant returns persist for a trading strategy that buys stocks with recent upward revisions and short sells stocks with recent downward revisions. Good news is impounded into stock prices more slowly than bad news. Post-earnings forecast revisions drift is negatively related to analyst coverage. The effect is strongest for stocks with greatest number of upward revisions. The introduction of the better disclosure standards has made the Canadian stock market more efficient. Originality/value: The paper adds to the limited evidence on the effect of analyst forecast revisions on the returns of Canadian stocks. It sheds light on the importance of analysts’ earnings forecast information and offers support for the investor conservatism and information diffusion hypotheses. It also shows how policy can improve market efficiency

The impacts of stock characteristics and regulatory change on mutual fund herding in Taiwan.

This article analyses the trading activity of Taiwanese open-end equity mutual fund herding behaviour over the period of 1996-2008. We found evidence of both directional and directionless herding. We also found that sell-side fund herding leads to price stabilization, whereas buy-side herding results in prices adjusting slowly. We found that the abolition of qualified foreign institutional investor (QFII) has reduced directionless and sell-side herding but has had no effect on buy-side herding

The Role of Technology Information on Financial Literacy in Indonesia

Financial management literacy is a significant knowledge to assist individuals' financial condition. There are various factors influencing monetary management, including Information technology (IT). Thus, this study aims to investigate the role of IT affecting individual awareness of financial literacy in Indonesia with household characteristics as the controlling variable; the data are generated from the Indonesian Family Life Survey conducted in 2014. Probit and logit models signify that ITs and household characteristics positively and significantly affect financial literacy. In detail, handphones, televisions and newspapers, marital status, education level, and household income levels have a positive and significant influence on households' accessing financial knowledge. Furthermore, multinomial logit estimation used to compare three different levels of financial literacy (low, medium, and high), indicates that six out of nine variables significantly affect financial literacy at low level to high levels, whereas only four out of nine influence financial literacy from medium to a high level

The impact of economic freedom on financial analysts' earnings forecast: Evidence from the Asia-Pacific region

This study investigates the impact of economic freedom (EcF) on analysts’ earnings forecast (AEF) accuracy. EcF is measured from five aspects: Government, Protection, Money, Trade, and Regulation. With the sample of 7,014 firms from 12 economies in the Asia-Pacific region over the 18-year period, this study finds an optimistic bias in AEFs. The optimistic bias is stronger for large firms, value firms, stock with high analyst coverage, and low dispersion in AEFs. Also, the optimistic bias is stronger from analysts in economies with less EcF than in more freedom ones. Analysts are making more accurate earnings forecasts for firms in economies with more EcF. In addition, the study finds the optimism bias reduced the earnings forecast accuracy. These findings may suggest that an increase of EcF would lead to more transparent financial statements, which further reduces the analysts’ forecast bias

Do mutual funds have consistency in their performance?

Using a comprehensive data set of 714 Chinese mutual funds from 2004 to 2015, the study investigates these funds’ performance persistence by using the Capital Asset Pricing model, the Fama-French three-factor model and the Carhart Four-factor model. For persistence analysis, we categorize mutual funds into eight octiles based on their one year lagged performance and then observe their performance for the subsequent 12 months. We also apply Cross-Product Ratio technique to assess the performance persistence in these Chinese funds. The study finds no significant evidence of persis- tence in the performance of the mutual funds. Winner (loser) funds do not continue to be winner (loser) funds in the subsequent time period. These findings suggest that future performance of funds cannot be predicted based on their past performance.info:eu-repo/semantics/publishedVersio

Robust estimation of bacterial cell count from optical density

Optical density (OD) is widely used to estimate the density of cells in liquid culture, but cannot be compared between instruments without a standardized calibration protocol and is challenging to relate to actual cell count. We address this with an interlaboratory study comparing three simple, low-cost, and highly accessible OD calibration protocols across 244 laboratories, applied to eight strains of constitutive GFP-expressing E. coli. Based on our results, we recommend calibrating OD to estimated cell count using serial dilution of silica microspheres, which produces highly precise calibration (95.5% of residuals <1.2-fold), is easily assessed for quality control, also assesses instrument effective linear range, and can be combined with fluorescence calibration to obtain units of Molecules of Equivalent Fluorescein (MEFL) per cell, allowing direct comparison and data fusion with flow cytometry measurements: in our study, fluorescence per cell measurements showed only a 1.07-fold mean difference between plate reader and flow cytometry data

Analyst Forecast Revisions and Short-term Return Continuations in Canada Stocks

[[abstract]]This paper examines the predictability of stock returns using analysts’ earnings forecast revisions information in Canada. We find stocks with greater number of upward forecast revision would earn significant higher future returns and the difference between upward and downward revisions could generate short term return continuation patterns. The effect are positively related to book-to-market ratio and analyst coverage, but negatively related to firm size. Our result shed light on the importance of analysts’ earnings forecast information and implied investors tend to underreact to recent upward earnings revisions and adopting a wait-and-see approach to good news

Investors' Reactions to Analysts' Forecast Revisions and Information Uncertainty: Evidence of Stock Price Drift.

This study examines the relationship among analysts’ earnings forecast revisions, information uncertainty, and stock returns and provides new evidence that stock price drift occurs after analysts’ earnings forecast revisions. Using data from the Australian stock market over the period of 1992 to 2009, we find that the stocks with upward earnings revisions experience positive returns, while stocks with downward revisions have negative returns. The effect is more prominent in stocks with high information uncertainty. The results are robust after controlling for market conditions, seasonality, and risks. Our evidence supports the conservatism bias model that investors tend to underweight the public information, such as analysts’ earnings forecast revisions. Importantly, our evidence provides possible explanations about the violation of the efficient market hypothesis. Our results suggest that the conservative bias causes investors not to sufficiently update their beliefs and eventually results in subsequent return continuation as investors’ underreaction to analysts’ earnings forecast revision is stronger with higher information uncertainty