Money managers might want to invest in a Farmers' Almanac to figure out which stocks to buy. That's because it appears companies that announce earnings on sunny days in New York City see their stocks perform better than companies that do so during inclement weather, according to a recent study by two accounting professors.
The study, which analyzed earnings announcements for all publicly traded companies from 1982 to 2004, found that companies that announce earnings during sunny days saw their stocks perform better than expected. This held true for companies that announced earnings that were below expectations, said John J. Shon, an assistant professor of accounting and taxation at Fordham University, and one of the authors of the study. “Those companies didn't do as badly as expected.”
While the difference in performance wasn't huge — around 50 basis points — it's enough for investors and companies to pay attention to, said Mr. Shon, who worked with Ping Zhou, vice president in the quantitative investment group of Neuberger Berman LLC, on the study.
Managers and companies shouldn't be too excited about the study's findings, however, Mr. Shon said. “This market uptick is temporary,” he said. “After a few days, the market realizes that this was silly and the stock goes back to where it should be.” — Jessica Toonkel Marquez, InvestmentNews