EVALUATING THE ACCURACY OF STOCK ANALYSTS’ RECOMMENDATIONS PUBLISHED IN BISNIS INDONESIA NEWSPAPER

ABSTRACT: Many investors have not enough knowledge, skill, and time to learn which stocks are the candidate to buy or sell. A stock analyst provides recommendation and help investorsto make buy or sell decision. The purpose of this study is to investigate the stock analysts’ recommendation accuracy published in Bisnis Indonesia daily newspaper. The data used in this research is analysts’ recommendation published in Bisnis Indonesia along the year 2005. There are 1,196 buy recommendations, 500 sell recommendations, and 649 price recommendations; released by six security companies. The technique used to measure the accuracy of price prediction is the Chi Square and to measure the accuracy of recommendation to sell or buy is Wilcoxon Match Pair Test. The result shows that the stock price and recommendation to sell tend to be inaccurate while recommendation to buy tends to be accurate.

Keywords: recommendation  accuracy,  stock  analyst,  price  recommendation, recommendation to sell, recommendation to buy

Author: Arnold  Kaudin & Yustin Hendro  Pranoto

Journal Code: jpmanajemengg070002

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