If a company in your portfolio issues a profit warning should you sell, buy more or just stay invested?

That is exactly the question I asked myself after experiencing quite a few profit warnings recently. I wondered if there wasn?t a tested rule I could follow that for example says sell immediately after a profit warning is announced and buy the position back in a few months? time.

I decided to take a look at a research studies on profit warnings to see if there is not a strategy that will make you come out ahead.