Hedge Funds and Analyst Optimism

• Main Author: TEO, Melvyn
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2010
• Subjects: Hedge funds; stock recommendations; stock performance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/bnp_research/34; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1031&context=bnp_research
• Institution: Singapore Management University

We find that analysts are more likely to issue favorable recommendations for stocks predominantly owned hedge funds. Moreover, these optimistic recommendations translate into poorer stock performance over the next three to six months. Hedge funds take advantage of these flattering reports by concurr...