Scandinavian Working Papers in Economics

Working Papers,
Hanken School of Economics

No 505: Do Analysts Leak Information to Preferred Customers?

Anders Ekholm () and Alexander von Nandelstadh ()
Additional contact information
Anders Ekholm: Swedish School of Economics and Business Administration, Postal: Arkadiankatu 22, P.O.B. 479; FIN 00101 Helsinki, Finland
Alexander von Nandelstadh: Swedish School of Economics and Business Administration, Postal: Arkadiankatu 22, P.O.B. 479; FIN 00101 Helsinki, Finland

Abstract: Inspired by the recent debate in the financial press, we set out to investigate if financial analysts warn their preferred customers of possible earnings forecast revisions. The issue is explored by monitoring investors’ trading behavior during the weeks prior to analyst earnings forecast revisions, using the unique official stock transactions data set from Finland. In summary, we do not find evidence of large investors systematically being warned of earnings forecast revisions. However, the results indicate that the very largest investors show trading behavior partly consistent with being informed of future earnings forecast revisions.

Keywords: Financial analyst; information leakage; investor size

33 pages, June 11, 2004

Price: 10

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505-951-555-838-7.pdf PDF-file

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