Investors base their decision on their emotional tendencies and sentiment. Here, emotional tendencies and sentiment are defined as the belief in future cash flows and investment risks, whereas the belief is not based on facts. The purpose of this study was to investigate the impact of investors’ sentiment on the returns of automobile companies accepted in Tehran Stock Exchange. This is an applied research in terms of objectives and it is a descriptive- ex post facto research in terms of data collection method. The research population of the present study is all the companies active in automobile industry in Tehran Stock Exchange from 2011 to 2016. Using a census sampling method, 22 companies and in total 132 company-year were analyzed. Multiple linear regression models were used for data analysis by means of Eviews8 software. The findings showed that the impact of investors’ sentiment on financial leverage and earnings per share of the company was negative and significant; meanwhile, the impact of investors’ sentiment on the return on assets of automobile companies was not significant.
