Beverly R. Walther

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We provide evidence that stocks with higher dispersion in analysts’ earnings forecasts earn lower future returns than otherwise similar stocks. This effect is most pronounced in small stocks and stocks that have performed poorly over the past year. Interpreting dispersion in analysts’ forecasts as a proxy for differences in opinion about a stock, we show(More)
This study compares the profitability of security recommendations issued by investment banks and independent research firms. During the 1996 through mid-2003 time period, the average daily abnormal return to independent research firm buy recommendations exceeds that of the investment banks by 3.1 basis points, or almost 8 percentage points annualized. In(More)
The accuracy of sell-side analysts' forecast revisions is related to a number of factors, including characteristics of the analyst and the age of the forecast. In this study we examine whether there are differences in how sophisticated and unsophisticated investors use these factors to predict the relative accuracy of forecast revisions. We adapt the lens(More)
Theories of underinvestment propose a link between cash flow volatility and investment and subsequent cash flow and earnings levels. Consistent with these theories, our results indicate that forecasting models that include volatility as an explanatory variable have greater accuracy and lower bias than forecasting models that exclude volatility. The(More)
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