CFRA Earnings Scores have predictive value that can be used to mitigate risks related to class action lawsuits. A detailed study finds that CFRA Earnings Scores on average trend higher and ultimately peak fifteen months prior to the class action filing date. This continues to support our view that analyzing the accrual component of earnings, the basis for CFRA Earnings Scores, is critical. The accrual component of a company’s earnings represents the more discretionary, non-cash component of a company's earnings, which tends to be less reliable and less persistent than earnings supported by cash flows. In addition, the accrual component can be highly influenced by management and can indicate aggressive accounting choices.
During this exclusive CFRA webinar, we highlighted the results of our recent quantitative study and the predictive power and relationship of CFRA’s Earnings scores for companies facing the risk of a class action lawsuit.
Presented by Will Suess, CFA, Senior Quantitative Analyst and moderated by Stacy Iamele, VP of Sales & Account Management.
Accompanying this webinar is a CFRA educational report on Class Action Lawsuit Risk Mitigation with CFRA Earnings Scores. Please contact us to obtain a copy of the report.