Information in financial markets : who gets it first?

I compare the timing of information acquisition among institutional investors and analysts, and I show that hedge fund trades predict the direction of subsequent analyst ratings change reports. I also show individual hedge funds persistently predict the reports of specific analysts. In addition, following analyst reports, hedge funds reverse their prior trades. These patterns suggest hedge funds have greater information acquisition skill relative to analysts, and that hedge funds privately communicate with certain analysts. Finally, I show hedge funds perform best among stocks with high analyst coverage, which suggests that analysts assist hedge funds in exploiting information acquisition advantages.Financ