Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
© 2020 Sam C. Garvin
While there exists vast literature on the signaling effect of share repurchases, share issues, insider purchases, and insider sales on a company’s own future equity returns, there has been no exploration into the signaling effect of these activities on closely related asset returns. This paper analyzes the effect of signaling by commodity-producing companies on the future returns of the underlying commodity itself. Aggregating data in the gold and oil industries, I develop a model that predicts future commodity returns based on prior signaling activity. I find some evidence that these activities have statistically significant predictive power on future commodity returns, but economic significance is simply not there. I also find that this signaling activity is validated by changes in future operating performance metrics.
Garvin, Sam, "The Effect of Signaling Activity by Commodity Producing Companies on Future Operating Performance and Future Commodity Returns" (2020). CMC Senior Theses. 2494.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.