Extraction of Forward-looking Financial Information for Stock Price Prediction from Annual Reports Using NLP Techniques

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2023-01-03

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5572

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Annual reports are one of the most important sources of information for financial decisions. They contain forward-looking statements (FLS), which describe future trends and expectations. Thus, several studies deal with the automated identification of FLS, where the latest ones involve a combination of a rule-based approach and machine learning classification. In this paper, we extend this research with state-of-the-art NLP methods. We use DistilBERT for FLS identification and determine their sentiment with FinBERT. The result is processed by a Random Forest model for stock price growth prediction of different periods. Our evaluation shows that DestilBERT achieves higher accuracies on FLS identification than existing methods. For short-term stock price rate prediction, the extracted FLS information together with historical stock data outperforms the sole use of historical stock data. For mid-term prediction, using FLS alone with DestilBERT shows the best result. Finally, in the long-term, FLS provide no benefit.

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Data Analytics, Leadership, Business Values, 10-k, annual report, bert, forward-looking statements, stock price prediction

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10

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Proceedings of the 56th Hawaii International Conference on System Sciences

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Attribution-NonCommercial-NoDerivatives 4.0 International

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