Analyst Contrarianism

2019 ◽  
Vol 4 (2) ◽  
pp. 61-88
Author(s):  
Zahn Bozanic ◽  
Jing Chen ◽  
Michael J. Jung
Keyword(s):  
Content Analysis ◽  
Empirical Evidence ◽  
Career Advancement ◽  
Specific Form ◽  
Market Reactions ◽  
Earnings Surprise ◽  
Analyst Optimism ◽  
Jel Classifications

We examine a specific form of what we term analyst contrarianism. We define contrarianism as cases where an analyst expresses a summary opinion contrary to the direction of a given earnings surprise or revision. Distinct from analyst optimism or boldness, we document that analysts interpret negative (positive) earnings news in a positive (negative) light in approximately 11–15 percent of reports. We conjecture that some analysts look for opportunities to make a contrarian stock call for their clients in order to gain visibility, recognition, and career advancement. Our empirical evidence, which is supported by analyst interviews and content analysis of analyst reports, shows that: (1) analysts at non-top-tier brokerage houses are more likely to make a contrarian call, (2) analyst reports that contain contrarian opinions are associated with greater market reactions, and (3) contrarian analysts are more likely to exhibit career advancement. JEL Classifications: G41; M41.

Conservative Reporting and Securities Class Action Lawsuits

2015 ◽  
Vol 30 (1) ◽  
pp. 93-118 ◽  
Author(s):  
Michael L. Ettredge ◽  
Ying (Julie) Huang ◽  
Weining Zhang
Keyword(s):  
Empirical Evidence ◽  
Financial Reporting ◽  
Class Action ◽  
Accounting Conservatism ◽  
Public Companies ◽  
Market Reactions ◽  
Five Dimensions ◽  
Class Action Lawsuits ◽  
Jel Classifications ◽  
Positive Accounting Theory

SYNOPSIS Positive accounting theory predicts that conservative financial reporting averts GAAP-based litigation. However, very little empirical evidence addresses whether and how accounting conservatism provides these benefits. Using a sample of lawsuits against public companies for alleged violations of U.S. GAAP, we examine the association of accounting conservatism with subsequent initiation of lawsuits and with four litigation outcomes: market reactions to lawsuits, duration of lawsuits, dismissals of lawsuits, and penalties approved by courts. We find that firms with greater degrees of conditional conservatism experience more favorable consequences on all five dimensions of litigation occurrence and outcomes. Several measures of unconditional conservatism are not associated with the litigation variables. Our study provides new empirical evidence supporting Watts's (2003a) litigation explanation for accounting conservatism. JEL Classifications: M41.

Deceptive Tactics Used in Online Shopping

2021 ◽  
Vol 9 (2) ◽  
pp. 407-424
Author(s):  
Seçil Toros
Keyword(s):  
Content Analysis ◽  
Empirical Evidence ◽  
Online Shopping ◽  
The Internet ◽  
High Propensity ◽  
Deceptive Advertising

The debate on deceptive advertising is getting more critical alongside the proliferation of the Internet and global e-commerce. This study aims to portray the nature and variances of deceptive tactics employed in online shopping sites by utilising an original database and a content analysis. Findings verified that the use of online deceptive advertising practices is common among Turkish online-shopping sites. First and foremost, the study displayed the high propensity of advertisers to omit or obscure information within the online ad content. The findings also provided empirical evidence on the correlational nature of involvement level and price with the deception levels.

Is Share Ownership a Condition for the Voluntary Revelation of Human Capital?

2020 ◽  
Vol 7 (2) ◽  
pp. 21-36
Author(s):  
Ruth Leticia Hidalgo ◽  
Amada Hidalgo ◽  
Miguel Ángel Oropeza ◽  
Eleazar Villegas ◽  
Sofía Elizabeth Ávila
Keyword(s):  
Human Capital ◽  
Empirical Evidence ◽  
Intellectual Capital ◽  
Career Advancement ◽  
Training And Development ◽  
Annual Reports ◽  
Listed Firms ◽  
Quality Life ◽  
The Family

Previous studies affirm the importance of intellectual capital (IC) for organizations, since they acquire value and make them more competitive in the market. In this context, the empirical evidence shows that the key ingredient classification of IC is human capital (HC). The purpose of this study is to know what kind of Mexican companies listed are those that voluntarily disclose the HC, as to date there is no evidence of this information. That is why the authors consider a sample of 875 annual reports, corresponding to 85 Mexican listed firms during the period 2005-2015. These samples reveal that the largest companies in terms of number of employees, belonging to the construction and textile sectors, and shares are held by the family, and they are most likely to disclose aspects of HC. Thus, the authors determine that items occupying the top positions relate to the experiences as managers and employees as well as training and development, just as the information unless disclosed refers to the opportunity for career advancement and quality life at work.

The Trend in Firm Profitability and the Cross-Section of Stock Returns

2017 ◽  
Vol 92 (5) ◽  
pp. 1-32 ◽  
Author(s):  
Ferhat Akbas ◽  
Chao Jiang ◽  
Paul D. Koch
Keyword(s):  
Risk Factors ◽  
Stock Returns ◽  
Cross Section ◽  
The Other ◽  
Analyst Forecast ◽  
Forecast Errors ◽  
Earnings Surprise ◽  
Firm Profitability ◽  
Earnings Momentum ◽  
Jel Classifications

ABSTRACT This study shows that the recent trajectory of a firm's profits predicts future profitability and stock returns. The predictive information contained in the trend of profitability is not subsumed by the level of profitability, earnings momentum, or other well-known determinants of stock returns. The profit trend also predicts the earnings surprise one quarter later, and analyst forecast errors over the following 12 months, suggesting that sophisticated investors underreact to the information in the profit trend. On the other hand, we find no evidence of investor overreaction, and our results cannot be explained by well-known risk factors. JEL Classifications: G12; G14.

scholarly journals Evidence on why firms use different disclosure outlets

2016 ◽  
Vol 29 (3) ◽  
pp. 274-291
Author(s):  
Alexey Feigin ◽  
Andrew Ferguson ◽  
Matthew Grosse ◽  
Tom Scott
Keyword(s):  
Empirical Evidence ◽  
Information Content ◽  
Information Acquisition ◽  
Voluntary Disclosure ◽  
Abnormal Return ◽  
Design Methodology ◽  
Small Subset ◽  
Market Reactions ◽  
Content Type ◽  
Acquisition Costs

Purpose The purpose of this study is to consider why firms use different disclosure outlets. The authors argue that the firm's choice of disclosure outlet can be explained by voluntary disclosure theories and investigate whether the market response around different disclosure outlets varies. Design/methodology/approach The authors investigate differences in the characteristics of firms purchasing analyst research, holding investor presentations or Open Briefings and compare market reactions around each disclosure event. Findings The authors find that firm incentives to reduce information acquisition costs or mitigate disclosure risk affect firm disclosure outlet choice, and mixed evidence in support of talent signalling motivations. There is a lower absolute abnormal return around Open Briefings and a higher signed abnormal return around purchased analyst research. Research limitations/implications The research is exploratory in nature and only considers a small subset of disclosure outlets. There may be differences in information content across disclosure outlets. Originality/value They show disclosure outlets are not homogenous and provide empirical evidence voluntary disclosure theories help explain differences between firms’ use of disclosure outlets. Considering the growing number of disclosure outlets available, disclosure outlet choice is likely to be an increasingly important topic in accounting research.

The Press and Suicides in the 19th Century: Investigating Possible Imitative Effects in Five Territories of the Austro-Hungarian Empire

2018 ◽  
Vol 81 (3) ◽  
pp. 424-435
Author(s):  
Florian Arendt
Keyword(s):  
Content Analysis ◽  
Empirical Evidence ◽  
19Th Century ◽  
Causal Order ◽  
Suicide Rates ◽  
The Press ◽  
The 19Th Century

During the 19th century, suicide rates increased in many countries. The press may have contributed to this increase, even though empirical evidence is lacking in this regard. We assessed suicide statistics within five territories of the Austro-Hungarian Empire between 1871 and 1910 and combined these data with a content analysis of suicide reporting in five newspapers, each appearing in one of the five territories. The analysis revealed a covariation between the quantity of reporting and the number of suicides within all five regions. Furthermore, the quantity of reporting significantly predicted the following year’s suicides. Although the causal order of suicides and the quantity of reporting should be assessed with caution, evidence is consistent with the idea that the press may have contributed to the establishment of suicide as a mass phenomenon. The findings also support contemporary guidelines for journalists, especially the notion of avoiding undue repetition of suicide stories.

scholarly journals The role of working environment in nurses’ career advancement from nursing mangers’ perspectives: A qualitative study

2016 ◽  
Vol 5 (4) ◽  
pp. 49 ◽  
Author(s):  
Mohammad Reza Sheikhi ◽  
Masoud Fallahi Khoshknab ◽  
Farahnaz Mohammadi ◽  
Fatemeh Oskouie
Keyword(s):  
Content Analysis ◽  
Qualitative Study ◽  
Career Advancement ◽  
Working Environment ◽  
Medical Sciences ◽  
Nursing Managers ◽  
Content Analysis Method ◽  
Data Saturation ◽  
Purposive Sample

Background: Nurses’ career advancement is a dynamic and unique concept which is explained in the context of working environment.Objective: This study aimed to explore the role of working environment in nurses’ career advancement from Nursing Mangers’ Perspectives.Methods: This qualitative study was conducted using content analysis method. Eighteen nursing managers from hospitals affiliated to Qazvin, Tehran, Iran and Shahid Beheshti Medical Sciences Universities participated in the study. A purposive sample of nursing mangers with rich experiences and maximum variations were selected and continued to reaching data saturation. The data were analyzed using content analysis method.Results: Participants believed that working environment have two major roles in nurses’ career advancement including motivating and restricting roles. According to nursing mangers, motivating working environment had facilitating role, while restricting working environment had blocking role in Iranian nurses’ career advancement.Conclusions: It seems that recognizing characteristics of working environment could assist nurses and nursing managers to develop conditions of working environment facilitating career advancement for nurses and decrease restrictive factors.

scholarly journals Settling the browser–grazer debate for African buffalo in grass-limited Eastern Cape thicket, South Africa

Koedoe ◽  
2018 ◽  
Vol 60 (1) ◽  
Author(s):  
Marietjie Landman ◽  
Kate Kloppers ◽  
Graham I.H. Kerley
Keyword(s):  
South Africa ◽  
Content Analysis ◽  
Empirical Evidence ◽  
National Park ◽  
Rumen Content ◽  
African Buffalo ◽  
Eastern Cape ◽  
Valid Measure ◽  
Additional Testing ◽  
Browse Species

Despite extensive evidence that African buffalo Syncerus caffer are grazers, De Graaff et al. using rumen content analysis of animals that had starved to death proposed that buffalo in grass-limited Eastern Cape thicket should be considered browsers. Although these anomalous findings were initially accepted, but later challenged, the browse-dominated diet continues to be used as a foundation for hypotheses on the diet of healthy animals. Consequently, the debate around buffalo as browsers or grazers in thicket has not yet been settled. We describe the diet of buffalo in the Addo Elephant National Park and include data from other published work from the region to test the importance of grass in buffalo diet. We show that the diet is dominated by grasses, even in grass-limited thicket, and that browse species are seldom dominant foods. Thus, there is no empirical evidence to corroborate the notion that buffalo switch their diet to browse when grass availability is low. In an attempt to advance our understanding of buffalo foraging in thicket, we reiterate that De Graaff’s work is not a valid measure of buffalo diet in succulent thicket and that additional testing of the browser–grazer hypothesis is not needed.Conservation implications: Our results confirm that buffalo are grazers, rather than browsers, in grass-limited Eastern Cape thicket. Thus, additional testing of the browser–grazer hypothesis for buffalo in the region is not needed.

Insider Trading, Litigation Concerns, and Auditor Going-Concern Opinions

2012 ◽  
Vol 88 (2) ◽  
pp. 365-393 ◽  
Author(s):  
Chen Chen ◽  
Xiumin Martin ◽  
Xin Wang
Keyword(s):  
Insider Trading ◽  
Class Action ◽  
Bad News ◽  
Audit Committees ◽  
Market Reactions ◽  
Negative Relation ◽  
Going Concern ◽  
Negative News ◽  
Going Concern Opinion ◽  
Jel Classifications

ABSTRACT: We investigate whether insider selling affects the likelihood of firms receiving auditor going-concern opinions. Prior studies document significant negative market reactions to the issuance of going-concern opinions, indicating that such opinions convey bad news to investors. Insider sales followed by negative news are likely to attract regulators' scrutiny and investor class-action lawsuits. Therefore, we predict that, to reduce the risk of litigation, managers have incentives to avoid receiving going-concern opinions after their insider sales by pressuring auditors for clean audit opinions. We evaluate this prediction empirically and find that the probability of receiving a going-concern opinion is negatively associated with the level of insider selling. Further analysis indicates that this negative relation is more pronounced for firms that are economically significant to their auditors but less pronounced when (1) auditors have concerns about litigation exposure and reputation loss and (2) audit committees are more independent. Finally, the negative relation between going-concern opinions and insider sales is significantly weakened after SOX. JEL Classifications: G18; M42; G48.

An Empirical Test of the Signaling Effect of Management's Earnings Forecasts: A Decomposition of the Earnings Surprise and Forecast Surprise Effects

1995 ◽  
Vol 10 (4) ◽  
pp. 787-802 ◽  
Author(s):  
Gillian Hian Heng Yeo ◽  
David A. Ziebart
Keyword(s):  
Stock Market ◽  
Market Reaction ◽  
Empirical Test ◽  
Earnings Forecasts ◽  
The Other ◽  
Earnings Forecast ◽  
Corporate Management ◽  
Management Earnings Forecasts ◽  
Market Reactions ◽  
Earnings Surprise

When corporate management issues an earnings forecast there are potentially two surprises. One potential surprise is that a forecast was issued and the other is the surprise in the earnings forecast. Accordingly, the observed stock market reaction to management earnings forecasts may be due to one or the other, or both. This study decomposes the cross-sectional variability in stock market reactions to management earnings forecasts into the portions attributable to the forecast surprise and the earnings surprise. The results indicate that the market's reaction is a function of both the earnings surprise and the forecast surprise. However, the market reaction is more associated with forecast surprise than with the earnings surprise. This suggests that results in previous studies on the market reactions to management earnings forecasts may need to be reconsidered.

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