Because spin-offs create new firms with characteristics markedly different from the original firm, institutional investors pre-committed to certain investment styles and/or subject to fiduciary restrictions have incentives to rebalance their portfolios at the time of the spin-off. Prior articles...

We examine whether the application of basic concepts of fundamental analysis can yield significant abnormal returns. Using a collection of signals that reflect traditional rules offundamental analysis related to contemporaneous changes in inventories, accounts receivables, gross margins, selling...

This paper tests whether the US stock market is myopic, in the sense that it places less than the appropriate weight on expected long-run earnings. The tests are made possible through reliance on a valuation model used by Ohlson [1995] that permits us, using only minimal assumptions, to make...

The extensive literature that investigates whether analysts' earnings forecasts are biased and/or inefficient has produced a history of conflicting evidence and no definitive answers to either question. This paper shows how two relatively small but statistically influential asymmetries in the...

In this paper we present evidence that a firm's stock price sensitivity to earnings news, as measured by outstanding stock recommendation, affects its incentives to manage earnings and, in turn, affects analysts' ex post forecast errors. In particular, we find a tendency for firms rated a Sell...

Corporate spin-offs create new firms with characteristics markedly different from the original firm. Consequently, institutional investors pre-committed to certain investment styles and/or subject to fiduciary restrictions have incentives to rebalance their portfolios at the time of the...

We test whether the US stock market is myopic in the sense of overvaluing short term earnings and undervaluing long term earnings (see, e.g., Porter [1992;1993]. Our tests rely on an accounting-based valuation model that generates predictions about how prices should relate to expected future...

This paper studies the information links that connect detailed financial statement data and security prices. We establish empirically the underlying relations between rules of fundamental analysis and: 1) analysts' earnings forecast revisions, 2) actual future earnings changes and 3) security...

This paper examines empirical relations between rules of fundamental analysis and actual future earnings changes, analysts' earnings forecast revisions, and contemporaneous stock returns. Our results indicate that many of the fundamental signals are related to future earnings and forecast...