This paper documents the tendency of mutual fund managers to follow analyst recommendation revisions when they trade stocks, and the impact of analyst revisioninduced mutual fund "herds" on stock prices. We find that mutual fund herds follow consensus revisions in analyst recommendations,...

Theories of herding behavior predict that only investors with sufficiently precise private information or those most overconfident will deviate from the crowd. Using portfolio holdings, this paper identifies contrarian funds as those pursuing distinctive investment strategies, i.e., as those...

This paper illustrates the unique role of sell-side analysts in improving market efficiency by examining their responses to mutual fund flow-driven mispricing. We find that a select group of analysts persistently issue price-correcting recommendation changes for stocks subject to flow-driven...

We examine proprietary research produced by buy-side analysts working for a large fund management company. We find that the buy-side research has investment value for a one-year horizon, and the analysts producing this research exhibit differential ability that tends to persist over time. The...