Small-Cap Ratings Often Fall Short

The correlation between analyst ratings of small-cap stocks and the subsequent returns of those stocks showed no statistical significance, according to analysis conducted by Barron’s. “In most cases,” the article argues, “you could have done just as well by flipping a coin.” The analysis, which used FactSet data, compiled all buy, sell, and hold recommendations outstanding as of January 1st for each of the past five years, then compared the average rating to shareholder returns… Read More

Male Stock Analysts Show Bias Toward Companies Run by Men

A recent  study has found that male stock analysts tend to be biased toward public companies headed by men as opposed to women, according to a recent article in The Wall Street Journal. The article says that this group bias leads to a boost in share prices of firms that they don’t favor—that is, because they typically underestimate performance of female CEOs, an earnings surprise from such a firm often leads to a boost in… Read More