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Short‐term institutional trading and return predictability in high‐accrual stocks

Dallin Alldredge et al.

Journal of Financial Research2026https://doi.org/10.1111/jfir.70041article
AJG 3ABDC A
Weight
0.50

Abstract

We investigate whether institutional investors have an ability to gain from trading high‐accrual stocks. We find that whereas long‐term institutional trading fails to capitalize on the stock pricing implications of high accruals, short‐term institutional investors gain from trading high‐accrual stocks. Specifically, both short‐term institutional selling and short‐selling activities have strong return predictability in high‐accrual firms. We also show that short‐term institutional investors are skilled at predicting future earnings surprises when operating accruals are high. This evidence on earnings surprises offers a meaningful reason for why short‐term institutional investors’ trades have predictive power over future returns in high‐accrual stocks.

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https://doi.org/https://doi.org/10.1111/jfir.70041

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@article{dallin2026,
  title        = {{Short‐term institutional trading and return predictability in high‐accrual stocks}},
  author       = {Dallin Alldredge et al.},
  journal      = {Journal of Financial Research},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/jfir.70041},
}

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Short‐term institutional trading and return predictability in high‐accrual stocks

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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