The Ou and Penman’s findings are also supported by Holthausen and Larcker’s (1992) statistical model, which is based on historical cost accounting information. Their overall results indicate that financial statement items can be combined into one summary measure to yield insights into the subsequent movement of stock prices. In addition, Abarbanell and Bushee (1997), using a collection of signals that reflect traditional rules of fundamental analysis, find the evidence consistent with the underlying focus of fundamental analysis on the prediction of earnings.