What insiders know about future earnings and how they use it: Evidence from insider trades

Ke, Bin; Huddart, Steven; Petroni, Kathy R.

doi:10.1016/s0165-4101(03)00036-3

Cited by 523 publications

(336 citation statements)

References 43 publications

Supporting

Mentioning

306

Contrasting

Unclassified

Order By: Relevance

“…Measurement precision is enhanced if information revelation is concentrated in one or more sub-periods. Indeed, similar to Ke et al (2003) results for insiders, we find that REIT managers_ strongest forecasts are for payoffs between three to nine months after the repurchase announcement. Such a delayed effect is observed by Akhigbe et al (2004) for REIT initial public offerings as well.…”

Section: Introductionsupporting

confidence: 84%

The Conditional Performance of REIT Stock Repurchases

Giambona

Golec

Giaccotto

2006

J Real Estate Finan Econ

View full text Add to dashboard Cite

This paper uses a conditional performance measure to test whether real estate investment trust (REIT) managers announcing stock repurchases have private information about their firms' prospects. We use stock price to condition for public information and measure the managers' implied private information by the covariance between repurchase size and subsequent stock payoffs (or operating performance). Results show that managers have private information but mostly with respect to long-term as opposed to near-term payoffs. We also find that repurchase size is positively related to a stock's idiosyncratic return volatility, perhaps because noisy stocks deviate farther from fundamental value, offering informed managers larger profit potential. Copyright Springer Science + Business Media, Inc. 2006REITs, Conditional performance, Noisy rational expectations, Stock repurchases,

show abstract

Section: Introductionsupporting

confidence: 84%

The Conditional Performance of REIT Stock Repurchases

Giambona

Golec

Giaccotto

2006

J Real Estate Finan Econ

View full text Add to dashboard Cite

show abstract

“…For example Elliott et al (1984) and Shivakumar and Waymire (1994) are unable to find a relation between insider trading activity/profits and specific information releases. These results as well as those of Noe (1999) and Ke et al (2001) suggest that insiders' information advantage is not related to advance knowledge of upcoming announcements. Second, evidence suggests that insiders' trades predict returns for up to a year following the trade, but that the majority of the abnormal return occurs in the first six months after the trade (Seyhun (1998)).…”

Section: Dependent Variablementioning

confidence: 59%

Characteristics of a firm's information environment and the information asymmetry between insiders and outsiders

Frankel

2004

Journal of Accounting and Economics

617

332

View full text Add to dashboard Cite

“…The strongest evidence is found in Ke et al (2003); they examine insider-trading patterns in advance of a break in quarterly earnings increases and find insider sales increase three to nine quarters before the earnings break. The authors conclude that insiders trade ahead of earnings breaks, but do so several quarters ahead of the break in order to avoid the appearance of trading on near-term, material news about earnings.…”

Section: Introductionmentioning

confidence: 99%

“…Our sample consists of a broad set of ordinary performance innovations that are less likely to attract regulatory scrutiny than extreme performance changes (see Ke et al, 2003). The use of a long measurement window increases the odds that our sample captures both the performance signals being used by the insiders and the transactions themselves.…”

Section: Introductionmentioning

confidence: 99%