Fundamental analysis is based on financial ratios. Their knowledge, as the European directive 51/2003 wants, influences the level of attention paid by investors and, as a consequence, the general market efficiency. Since indicators are a plethora, our work aims to examine whether and to what extent the indicators used at international level are useful in Italy and to identify a set of indicators highly predictive of the stock returns. Moreover, in a big Italian crisis moment, we aim to understand whether the fundamental analysis, based on those indicators, is valid. To answer those questions, our paper run a value relevance study on the main financial indicators of 75 Italian sample companies over seven years, from 2005 to 2011. Our results highlight that fundamental financial indicators, used conjunctively, contains useful information for the market. In this direction, a restricted set of indicators has been found to predict the stock trends. The predictive power of those indicators is confirmed also in period of crisis, highlighting a strong power of fundamental analysis for equity valuation in turbulent time as well.
Gli indicatori di bilancio per le valutazioni di mercato: uno studio di value relevance in Italia / f. dainelli; a. visconti. - In: IMPRESA PROGETTO. - ISSN 1824-3576. - ELETTRONICO. - 1:(2014), pp. 1-24.
Gli indicatori di bilancio per le valutazioni di mercato: uno studio di value relevance in Italia
DAINELLI, FRANCESCO;
2014
Abstract
Fundamental analysis is based on financial ratios. Their knowledge, as the European directive 51/2003 wants, influences the level of attention paid by investors and, as a consequence, the general market efficiency. Since indicators are a plethora, our work aims to examine whether and to what extent the indicators used at international level are useful in Italy and to identify a set of indicators highly predictive of the stock returns. Moreover, in a big Italian crisis moment, we aim to understand whether the fundamental analysis, based on those indicators, is valid. To answer those questions, our paper run a value relevance study on the main financial indicators of 75 Italian sample companies over seven years, from 2005 to 2011. Our results highlight that fundamental financial indicators, used conjunctively, contains useful information for the market. In this direction, a restricted set of indicators has been found to predict the stock trends. The predictive power of those indicators is confirmed also in period of crisis, highlighting a strong power of fundamental analysis for equity valuation in turbulent time as well.File | Dimensione | Formato | |
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