The goal of this study is to penetrate analysts’ “black box” by providing new insights into the inputs analysts use to make their decisions and the incentives that influence these decisions. We survey 365 sell-side analysts and conduct 18 detailed follow-up interviews. Analysts indicate that industry knowledge is the single most important determinant of their compensation and the most important input to both their earnings forecasts and stock recommendations. They rate broker votes, a measure of client satisfaction, as the second most important factor in determining their compensation behind industry knowledge. Analysts report that private phone calls are the most useful form of contact they have with senior management, and that maintaining strong relationships with management is fundamental to their success. Overall, we believe the results of our study are beneficial to academic researchers, investors, and analysts.
Full paper on Sell-Side Analysts Below:
Top value fund managers are ready for the small cap bear market to be done
During the bull market, small caps haven't been performing well, but some believe that could be about to change. Breach Inlet Founder and Portfolio Manager Chris Colvin and Gradient Investments President Michael Binger both expect small caps to take off. Q1 2020 hedge fund letters, conferences and more However, not everyone is convinced. BTIG strategist Read More