Analyst Selective Tracking And Profit Forecast For Losing Companies

The analyst mainly studies the securities market and its changing trends,interprets the information disclosed by listed companies through the release of research reports,stock investment ratings,and profit forecasts of listed companies,and provides forecast recommendations to investors.Due to the information asymmetry between listed companies and investors,securities analysts act as information intermediaries.On the one hand,they interpret and analyze the information disclosed by listed companies;on the other hand,they play the role of supervisor and have a restrictive effect on managers.Based on the efficient market hypothesis theory,principal-agent theory,information asymmetry theory,and China's national conditions,this article combines the research theories and methods of previous scholars to measure and analyze the number of analysts tracking the company and the number of analysts publishing research reports.The division tracked the company 's performance using the company 's return on total assets and long-term stock excess returns to discuss whether the analyst has the ability to choose a more promising company.Based on this,the company's fundamentals are first controlled,and the basic control variables are regressed to obtain residuals to measure the analyst's selective tracking,and to explore whether the analyst's selective tracking can reflect the analyst's private information to distinguish the loss-making companies with better operating performance,send a signal to investors.And add the moderating variable of information transparency to study the impact of information transparency on analysts' earnings forecasts.This article is based on the sample of all A-share listed companies from 2012 to2018.When selecting a sample,referring to previous literature research,the data was rigorously screened,excluding financial insurance and non-regulated industries,excluding data with obvious data missing,and deleting data without stock prices,And the data contains enough observations to build variables in the baseline model followed by the analyst.On the premise of ensuring the accuracy of the above data,the data were collated to minimize errors to obtain 10,733 samples.The following research results are obtained:(1)The analyst tracking is positively related to the company's future operating performance,and the analyst has the ability to forecast earnings.(2)The analyst's selective tracking reflects the private information of the analyst,which is positively related to the future operating performance of theloss-making company.The analyst's selective tracking can distinguish the better-performing companies in the future and serve as an alternative source of information for the loss-making companies,send a signal to investors.(3)With the addition of information transparency as a moderator,analyst tracking is significantly negatively related to the company's future operating performance,indicating that the lower the information transparency,the more valuable the analyst's private information is.In theory,the research in this article has enriched the analyst research literature to a certain extent.The evidence provided in this article and the analyst's self-selection tracking play a greater role in determining the analyst tracking of loss-making companies.In practice,The selective tracking of analysts beyond the basic public information has obvious advantages,because it can also infer information beyond the fundamentals of the company covered,and investors can refer to information beyond the fundamentals of the company covered by the analyst to provide a direction for investor decision-making.