Source: “Inside the Black Box.” Click to enlarge.
FORTUNE — As someone who has been tracking the forecasts of Apple (AAPL) analysts for nearly five years, I was not entirely surprised to learn that when 365 sell-side analysts (not just covering Apple) were asked what factors affected their compensation, the accuracy and timeliness of their earnings forecasts came in dead last.
This revelation comes from a survey conducted by a team of business school academics and posted online last month by Social Science Electronic Publishing. Among its other findings:
- 82% of the analysts were men, 45% had MBAs, 43% followed anywhere from 16 to 25 companies
- 81.5% named hedge funds as their employer’s most important clients; 13% named retail clients
- Private phone calls with management were their most useful sources for generating forecasts
- 53% said they had direct contact with a CEO or CFO five or more times a year
- The most likely consequence of issuing a below-consensus forecast was to increase their clients’ perception of their credibility
There’s lots more where that came from.
Link: Inside the “Black Box” of Sell-Side Financial Analysts, by Lawrence Brown, Andrew Call, Michael Clement and Nathan Sharp.