Analyzing the Analysts: When do Recommendations Add Value? (.pdf)

This one is a must for any investment class! Jegadeesh, Kim, Krische, and Lee provide a fascinating look at investment analysts. They study stock analyst recommendations. Some of their findings are that analysts tend to prefer glamour stocks (higher growth and with momentum), and firms with whom the analyst’s firm has an investment banking relationship. Additionally, changes in analyst recommendations tend to have more information content than do the levels of recommendations. [FinanceProfessor.com Annotation]