Analyst Interest as an Early Indicator of Firm Fundamental Changes and Stock Returns

ABSTRACT

We posit that a change in analyst interest in a firm is an early indicator of the firm's future fundamentals, capital market activities, and stock returns. We measure increases in analyst interest by observing analysts who do not cover a firm but participate in that firm's earnings conference call, and we measure decreases in analyst interest by observing analysts who cover a firm, yet are absent from that firm's call. We find that ...more