Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Matthew Magilke

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2015 Jaison T. Kimura


It is generally accepted that the association between leading indicators and stock prices is evidence that the market efficiently prices the contribution of the leading indicators to future earnings. In this study, I examine whether investors incorporate the implications of one leading indicator, order backlog, in an efficient manner when determining stock prices and earnings forecasts. Furthermore, I investigate whether there is a difference between how the sophisticated and unsophisticated investor values order backlog given the fact that consensus analysts’ forecasts correctly incorporate the information in backlog for future earnings. I find that the market is more efficient in pricing the implications of order backlog with regards to firms with a high percentage of sophisticated investors compared to those with a low percentage of sophisticated investors. Moreover my results imply that unsophisticated investors overly-fixate on order backlog information.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.