Are corporate managers savvy about their stock price? Evidence from insider trading after earnings announcements

Adam Kolasinski and Xu Li

Journal of Accounting and Public Policy, 2010, vol. 29, issue 1, pages 27-44

Abstract: We 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.

Keywords: Insider; trading; Market; timing; Post-earnings; announcement; drift; Underreaction; anomolies (search for similar items in EconPapers)
Date: 2010
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Persistent link: http://EconPapers.repec.org/RePEc:eee:jappol:v:29:y::i:1:p:27-44

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