Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

Analyst Coverage, Blockholder Monitoring, and the Informativeness of Insider Purchases

Sölveland, Fredrik LU ; Sköldberg, Emil LU and Lyrvall, Fredrik LU (2026) IBUH19 20261
Department of Business Administration
Abstract (Swedish)
This thesis investigates how analyst coverage and blockholder ownership shape the informativeness of insider purchases in a market characterized by concentrated ownership, dispersed analyst coverage, and high retail participation. While prior research has established a negative relationship between analyst coverage and insider purchase abnormal returns in the U.S., whether this relationship generalizes to markets with different institutional features remains an open question. Using a sample of insider purchase events on the Swedish equity market (Nasdaq Stockholm and First North) between 2018 and 2024, we conduct an event study and cross-sectional OLS regression analysis. Consistent with the investor recognition channel of Merton (1987),... (More)
This thesis investigates how analyst coverage and blockholder ownership shape the informativeness of insider purchases in a market characterized by concentrated ownership, dispersed analyst coverage, and high retail participation. While prior research has established a negative relationship between analyst coverage and insider purchase abnormal returns in the U.S., whether this relationship generalizes to markets with different institutional features remains an open question. Using a sample of insider purchase events on the Swedish equity market (Nasdaq Stockholm and First North) between 2018 and 2024, we conduct an event study and cross-sectional OLS regression analysis. Consistent with the investor recognition channel of Merton (1987), the results confirm that insider purchases are followed by significant positive abnormal returns, and that analyst coverage amplifies rather than dampens this effect in a market with high retail participation. We also find no robust evidence that blockholder ownership moderates the relationship between analyst coverage and insider purchases abnormal returns. These findings suggest that the effect of analyst coverage and blockholder on insider purchase informativeness is institutionally contingent and that in markets where retail investors form a meaningful share of the trading base, analyst coverage shapes informativeness through audience size rather than through the reduction of information asymmetry. (Less)
Please use this url to cite or link to this publication:
author
Sölveland, Fredrik LU ; Sköldberg, Emil LU and Lyrvall, Fredrik LU
supervisor
organization
course
IBUH19 20261
year
type
M2 - Bachelor Degree
subject
keywords
Insider purchases, abnormal returns, analyst coverage, investor recognition, blockholder ownership
language
English
id
9246264
date added to LUP
2026-07-03 09:00:07
date last changed
2026-07-03 09:00:07
@misc{9246264,
  abstract     = {{This thesis investigates how analyst coverage and blockholder ownership shape the informativeness of insider purchases in a market characterized by concentrated ownership, dispersed analyst coverage, and high retail participation. While prior research has established a negative relationship between analyst coverage and insider purchase abnormal returns in the U.S., whether this relationship generalizes to markets with different institutional features remains an open question. Using a sample of insider purchase events on the Swedish equity market (Nasdaq Stockholm and First North) between 2018 and 2024, we conduct an event study and cross-sectional OLS regression analysis. Consistent with the investor recognition channel of Merton (1987), the results confirm that insider purchases are followed by significant positive abnormal returns, and that analyst coverage amplifies rather than dampens this effect in a market with high retail participation. We also find no robust evidence that blockholder ownership moderates the relationship between analyst coverage and insider purchases abnormal returns. These findings suggest that the effect of analyst coverage and blockholder on insider purchase informativeness is institutionally contingent and that in markets where retail investors form a meaningful share of the trading base, analyst coverage shapes informativeness through audience size rather than through the reduction of information asymmetry.}},
  author       = {{Sölveland, Fredrik and Sköldberg, Emil and Lyrvall, Fredrik}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Analyst Coverage, Blockholder Monitoring, and the Informativeness of Insider Purchases}},
  year         = {{2026}},
}