ERIC Number: ED290650
Record Type: Non-Journal
Publication Date: 1986-Jul
An Inquiry into the Relationship between Projected Changes in Earnings per Share and Subsequent Security Performance.
Barbee, William C., Jr.
The purpose of this study was to examine the variable of estimated earnings in order to determine how forecasts might be utilized to develop a securities portfolio strategy. The hypothesis stated that there is an inverse relationship between projected change in earnings per share and security performance. Ninety-one New York Stock Exchange corporations listed in the Standard and Poor's 100 Index during 1984 were used to test this research hypothesis. All of the rank correlation coefficients resulted in statistically negative values, and the results were sufficient for rejection of the null hypothesis that there is no relationship between the variables. The study concluded that positive earnings' projections may be a misleading criterion for securities' selection. Both the theoretical analysis and empirical evidence of this research project support the concept that portfolio performance would be enhanced if securities were selected from among those with unfavorable earnings' projections. A table is included. (JHP)
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: N/A