Will An Analyst Report More Positively for Less-Covered Stocks When They Are First Included on His/Her List? [分析師是否於首次分析時對受忽略股票有較正面的研究報告?]
Journal
Journal of Accounting Review
Journal Issue
66
Pages
83-120
Date Issued
2018
Author(s)
Lo H.-C.
Abstract
A security analyst may trade off the benefits of his/her covering companies against the costs. He/she includes less-covered stocks on the lists unless he/she feels optimistic regarding them. This study aims to investigate whether a security analyst would report differently when initiating coverage for the less-covered versus the well-followed stocks and how the market reacts to these reports. The results support the notion that an analyst tends to release more positive research reports for coverage initiation on the less-covered stocks, and the market reacts favorably to such positive information. Moreover, our results show that the less-covered stocks gradually increase their firm value, resulting partially from the enhancement in liquidity. Furthermore, there exists a positive relationship between the firm ages and their long-run stock returns since coverage initiation.
Type
journal article