Separating Winners from Losers
High book-to-market (B-to-M) firms tend to be in poor financial health, as reflected by their low stock prices and poor earnings performance. Yet research consistently shows that a portfolio of these “value” firms outperforms both the overall market and portfolios comprised of low B-to-M “glamour” firms.
The reason for this is because a small number of high B-to-M firms are strong enough to raise the … [ Read more ]
Content: Article | Author: Joseph D. Piotroski | Source: Capital Ideas | Subjects: Accounting, Finance | Industry: Investing