Join educated investors who get actionable, evidenced-based wealth management insights delivered directly to their inbox.
Strategic Investment Advisors, LTD

Analysts’ Disappearing Edge

A long-standing anomaly for efficient markets has been what’s called “post-revision return drift” (PRD). Research into stock returns has found that changes in sell-side analyst recommendations for buying and selling stocks predict future long-term returns in the same direction as the change. Upgrades are followed by positive returns, and downgrades are followed by negative returns.

To explain the anomaly, it’s been hypothesized that securities analysts are better informed and more skillful than the investing public in general. In addition, PRD persists because investors typically underreact to analysts, responding only partly upon their revision announcements and slowly thereafter, perhaps taking months.

Read the rest of the article on

Contact Us
©2023 Strategic Investment Advisors, Ltd. | Website Design by Evolutionize

Strategic Investment Advisors, Ltd. is a registered investment adviser with the states of Missouri and Illinois and may only transact business with residents of those states, or residents of other states where otherwise legally permitted to exemption or exclusion from registration requirements.