Journal ArticleDOI
The Use of Valuation Models by UK Investment Analysts
TLDR
For instance, the authors found that analysts prefer DCF to accruals-based methods, and combine it with price to earnings ratios, and they have many reasons for choosing this model, but it is most heavily used on IT and media firms.Abstract:
Purpose - To find out how UK investment analysts use valuation models.
Design/methodology/approach - Cites prior studies using residual income and discounted cash flow (DCF) models, while proposing to interview analysts. Combines content analysis of 98 equity reports by investment bank analysts between 2000 and 2003, and 35 structured interview responses (in the form of Likert scales) about what models they use, why they use them and how.
Findings - Finds that analysts prefer DCF to accruals-based methods, and combine it with price to earnings ratios. Notes they have many reasons for choosing this model, but it is most heavily used on IT and media firms. Adds a distinct preference for DCF among buy-side analysts.
Research limitations/implications - Proposes setting up the discipline of 'sociology of financial accounting'. where sell-side analysts interact with fund managers.
Originality/value - Uses a direct approach to the questgion of how accounts are used by third parties.read more
Citations
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Journal ArticleDOI
Stock Market Analysis: A Review and Taxonomy of Prediction Techniques
TL;DR: A concise review of stock markets and taxonomy of stock market prediction methods is provided, then some of the research achievements in stock analysis and prediction are focused on and some challenges and research opportunities are presented.
Journal ArticleDOI
Target price accuracy:international evidence
TL;DR: In this article, the authors examined if analyst-and country-specific characteristics explain the variation in target price (TP) accuracy, and found that significant variation in average TP accuracy across countries is due to differences in accounting disclosure quality, the origin of the legal system, cultural traits, and IFRS regulation.
Journal ArticleDOI
Does Valuation Model Choice Affect Target Price Accuracy
TL;DR: In this article, the authors investigate whether the choice of valuation model affects the forecast accuracy of the target prices that investment analysts issue in their equity research reports, controlling for factors that influence this choice.
Posted Content
Who uses financial reports and for what purpose? Evidence from capital providers
Stefano Cascino,Mark Clatworthy,Beatriz García Osma,Joachim Gassen,Shahed Imam,Thomas Jeanjean +5 more
TL;DR: In this article, the authors review the academic literature on the use of financial reporting information by capital providers and identify gaps in the literature and suggest areas where future research can help inform important academic and policy debates.
Journal ArticleDOI
Valuation Model Use and the Price Target Performance of Sell-Side Equity Analysts
TL;DR: In this paper, the authors investigated the influence of inferred valuation model use on the investment performance of sell-side equity analysts' published price target opinions and found that price targets have investment value because they predict future stock returns.
References
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Book
Qualitative Data Analysis: An Expanded Sourcebook
TL;DR: This book presents a step-by-step guide to making the research results presented in reports, slideshows, posters, and data visualizations more interesting, and describes how coding initiates qualitative data analysis.
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TL;DR: History Conceptual Foundations Uses and Kinds of Inference The Logic of Content Analysis Designs Unitizing Sampling Recording Data Languages Constructs for Inference Analytical Techniques The Use of Computers Reliability Validity A Practical Guide
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Dividend Policy, Growth, and the Valuation of Shares
TL;DR: In this paper, the effect of differences in dividend policy on the current price of shares in an ideal economy characterized by perfect capital markets, rational behavior, and perfect certainty is examined.
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Basic Content Analysis
TL;DR: In this article, Content Classification and Interpretation Techniques of Content Analysis issues in Content Analysis are discussed and an overview of the content classification and interpretation techniques of content analysis issues are discussed.
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Earnings, Book Values, and Dividends in Equity Valuation*
TL;DR: In this article, a model of a firm's market value as it relates to contemporaneous and future earnings, book values, and dividends is developed and analyzed, and two owners' equity accounting constructs provide the underpinnings of the model: the clean surplus relation applies and dividends reduce current book value but do not affect current earnings.