Are corporate managers savvy about their stock price? Evidence from insider trading after earnings announcements
AbstractWe find that insiders trade as if they exploit market underreaction to earnings news, buying (selling) after good (bad) earnings announcements when the price reaction to the announcement is low (high). We also find that insider trades attributable to public information about earnings and the price reaction generate abnormal returns. By demonstrating that managers spot market underreaction to earnings news, our results imply that managers are savvy about their company's stock price.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Accounting and Public Policy.
Volume (Year): 29 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/jaccpubpol
Insider trading Market timing Post-earnings announcement drift Underreaction anomolies;
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