Buy-side trades and sell-side recommendations: Interactions and information content

► We examine the performance of institutional trades and analyst stock recommendations as well as their interactions. ► Institutional trades follow analyst recommendation changes but not vice versa. ► Institutional purchases outperform their sales, but only on the day of the transaction. ► Institutional trades in the same direction as recommendation changes do not outperform trades in the opposite direction. ► Institutional investors do not exhibit skills to discern the quality of analysts' recommendations.