Navigating the Current Equity Landscape with an Emphasis on High Profits and High Growth Reopening and inflationary themes conjure many competing narratives on the proper way to build portfolios or allocate capital in preparation for […more]
Given the significant volatility over the previous 12 months in overall market returns and style-based indices, we believe it is helpful to provide ongoing guidance related to the aggregate intrinsic value characteristics of popular indices […more]
In our Valuation Beta working paper, we emphasized the valuation vs cheapness contrast between intrinsic value and book to price (HML) classifications. This highlighted that “cheap” HML classifications unsupported by intrinsic value were a source […more]
The transition into Q4 is accompanied by a notable milestone. The Applied Finance Group turns 25 years old today! We want to take this opportunity to thank our research partners that appreciate the merit of […more]
In the past 5-10 years, investors have seen drastic underperformance from traditional value factors. Russell style indices, which use sales growth, earnings growth, and book/price to determine value and growth, have seen a strong divergence in performance since the 2008 recession. Let’s examine Russell Value/Growth Anomalies, Share Repurchases and Intellectual Assets.
The uncertainty of the timeline for a “return to normalcy” has created liquidity concerns across practically all economic sectors. Companies of all sizes and levels of financial strength are drawing on open lines of credit to weather worst case scenario contagion estimates. Commercial landlords will likely see missed rent payments with little demand to lease shuttered storefronts, while rising unemployment may lead to a spike in residential mortgage and rental delinquencies; this has clearly impacted the recent performance of financial stocks, REITs and mortgage insurers.
To continue to help our clients navigate the economic impacts of the pandemic, we have updated market performance data from the previous write-up to include last week’s historic sell-off […more]
The Gross Profitability Trap “But this time, it’s different!” More foolish words are rarely spoken in the financial industry, but they always seem to find their way back into the stock market lexicon. A firm’s […more]