Graduation Year
2017
Date of Submission
4-2017
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Joshua Rosett
Terms of Use & License Information
Rights Information
© 2017 Andrew S Burgard
Abstract
Mutual funds and money managers have recently come under fire for their inability to beat market level returns since the Great Recession. With the recent trend towards passive money management through ETFs and other market-based securities, many investors have come to doubt whether above market returns are realizable in today’s economic climate. This paper examines whether business news has any predictable impact on stock price. Specifically, the paper explores the impact of analyst reports, mergers & acquisition news, legal affairs, insider buying and selling and changes to executive leadership on a stock’s excess returns. The results show that optimistic analyst ratings are correlated with positive excess returns before, during, and after the ratings are released. Furthermore, pessimistic analyst ratings are correlated with negative excess returns over the same time frame. These results provide support for a short term trading strategy that mirrors analyst opinions.
Recommended Citation
Burgard, Andrew, "Can Business News Provide Insight into a Stock’s Future Price Performance?" (2017). CMC Senior Theses. 1673.
https://scholarship.claremont.edu/cmc_theses/1673
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.