Improving returns on strategy decisions through integration of neural networks for the valuation of asset pricing : the case of Taiwanese stock

Most of the growth forecasts in analysts' evaluation reports rely on human judgment, which leads to the occurrence of bias. A back-propagation neural network (BPNN) is a financial technique that learns a multi-layer feedforward network. This study aims to integrate BPNN and asset pricing models to avoid artificial forecasting errors. In terms of evaluation, financial statements and investor attention were used in this case study, demonstrating that modern analysts should incorporate the evaluation advantages of big data to provide more reasonable and rational investment reports. We found that assessments of revenue, index returns, and investor attention suggest that stock prices are prone to undervaluation The levels of risk-taking behaviors were used in the classification of robustness analysis. This study showed that when betas range from 1% to 5%, both risk-taking levels of investors can hold buying strategies for the long term. However, for lower risk-taking preferences, only when the change exceeds 10 percent, the stock price is prone to overvaluation, indicating that investors can sell or adopt a more cautious investment strategy.