Topic: Revisiting the Cross-Section of Expected Stock Reterns: Evidence from a Textual Analysis of Buy Recommendations

Speaker: Byoung-Hyoun Hwang, Associate Professor (with tenure), Nanyang Business School, Nanyang Technological University

Time: 10:00am-11:30am, November 22

Location: 4-101

Abstract:

Our paper examines analyst reports and online stock opinion articles, which recommend that investors buy stocks that, based on prior literature, trade at comparatively high prices and earn low future returns. We conduct textual analysis and test whether the justifications provided in these buy recommendations mostly (1) emphasize a stock’s safe-haven quality, (2) indicate general investor exuberance, or (3) point to a specific preference for stocks with high upside potential. We find that the buy recommendations mostly emphasize stocks’ upside potential. Our results suggest that non-traditional investor preferences play a material role in explaining the cross-section of expected stock returns.

Speaker Biography:

Byoung-Hyoun Hwang is an Associate Professor of Finance in the Nanyang Business School at NTU-Singapore. Prior to joining NTU, he was an Associate Professor of Finance in the SC Johnson College of Business at Cornell University.

Dr. Hwang teaches Equity Investing with Big Data to undergraduate students as well as Empirical Asset Pricing to Ph.D. students.

His research has been published in various academic journals in the fields of Finance and Management. It has also been described in media outlets such as the Wall Street Journal and Bloomberg. Dr. Hwang has given more than one hundred talks at academic institutions, research groups, and conferences around the world. He has also advised government organizations, such as the U.S. Securities and Exchange Commission, and consulted for major hedge funds in the U.S. and Europe.

Dr. Hwang received a Ph.D. in Finance from Emory University in 2009. He was born and grew up in Germany.