Investor Response to Online Value Line Rank Changes: Foreign versus Local Stocks

Zhang, Ying; Le, Steven V.; Lockwood, Jimmy; Prombutr, Wikrom

doi:10.2139/ssrn.2696395

Cited by 1 publication

(2 citation statements)

References 15 publications

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“…From the standpoint of international investors (Chamberlain et al, 1995), argue that Value Line's recommendations published in newsletters have little value to non-US listed foreign stocks, probably due to unfamiliar political risks and legal environments, currency movements, different accounting principles and auditing practice, institutional and cultural differences, and restricted information. (Zhang et al, 2015a) further argue that the Value Line enigma is confined to US stocks. They find no evidence of a Value Line enigma for recommendations made for foreign stocks that are listed or nonlisted on US exchanges.…”

Section: International Explanationmentioning

confidence: 99%

“…A number of researchers contend that the early studies supporting the enigma are flawed (Hausman, 1969;Gregory, 1983), and that higher returns associated with the higher timeliness rankings are simply a compensation for assuming higher risk (Kaplan and Weil, 1973;Lee and Park, 1987). Others argue that the anomaly disappears after accounting for transaction costs (Hall and Tsay, 1988) or is confined to US stocks (Zhang et al, 2015a). Even others suggest that the Value Line anomaly is simply a manifestation of earnings surprises (Affleck-Graves and Mendenhall, 1992) or price momentum (Nayar et al, 2011).…”

Section: Introductionmentioning

confidence: 99%

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Half a century of research on Value Line: a comprehensive review

Zhang

Alexander

2016

Managerial Finance

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Purpose – The purpose of this paper is to present a comprehensive review of literature on Value Line. First, the authors summarize the literature examining the Value Line enigma. Second, the authors survey the literature on Value Line’s other valuation metrics. Finally, literature comparing Value Line’s database to other tradition data sources is presented. Design/methodology/approach – Approximately 60 academic articles published from 1967 to 2015 on Value Line are systematically reviewed and analyzed. Findings – Despite extensive research, empirical evidence on the Value Line enigma remains less than conclusive. Empirical evidence suggests that Value Line’s other metrics are useful and efficacious. In terms of forecast accuracy and consistency, evidence seems to suggest that Value Line Investment Survey database is as good as other databases. Originality/value – Academic research on Value Line began over half a century ago and is extensive; however, a comprehensive review of previous work is non-existent. This paper fills that gap in the literature and presents a comprehensive review of academic literature on Value Line.

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Section: International Explanationmentioning

confidence: 99%