The recommendation of financial analysts plays an important role in making investment decisions. The method of constructing a portfolio using such recommendations does not rely on quantitative models instead it relies on research of the analysts and their qualitative views. We explore paradigms...

Using a novel database, we show that the stock-price impact of analyst trade ideas is at least as large as the impact of stock recommendation, target price, and earnings forecast changes, and that investors following trade ideas can earn significant abnormal returns. Trade ideas triggered by...