Stock Selection and Analysis - Articles & White Papers
Research and papers relating to stock selection and security analysis. This section includes reports and articles which help fund managers and investment analysts examine their stock selection process. Popular themes in this category include papers on company valuation methods; how to assess equity valuation and identify the best approaches to stock screening; how to use price/book ratio..., PE multiples, PEG ratios, equity cash flow, free cash flow, APV (Adjusted Present Value), economic profit, EVA, dividend discount models, and other metrics. Papers which help equity fund managers use factor-based investing models to build a better beta (smart beta approaches using risk factors to achieve superior returns) are also well read. Other surveys and white papers in this section look at the case for active equity managers, the characteristics (hallmarks) of successful equity managers, how to use big data in stock selection, active versus passive strategies, momentum strategies, trading rules, pairwise correlations and stock volatility. A key question for equity managers is how to determine the valuation of an equity market. One of the most credible tools for equity valuation is the Shiller PE. To see our latest blog post on the Shiller PE and economic conditions, please visit https://www.savvyinvestor.net/blog/Shiller-PE-Economic-Conditions
Cheap stocks have been underperforming for the last 18 months, while expensive stocks are overperforming. In fact, current value performance parallels the Tech Bubble and Global Financial Crisis (GFC). This comes as a surprise to many. We have been living through an extraordinary return environment that has, largely, fallen…
Studies have shown that pension funds have inherent biases to their domestic markets within their equity allocations. In this paper, FTSE Russell seeks to understand the impact of home bias in the equity allocations of five large pension fund markets—the US, UK, Japan, Canada, and Australia—by examining the extent of their…
Invesco's 4th annual Global Factor Investing Study is based upon interviews with over 240 instutional investors and is the largest in-depth analysis of global factor investing.
Epoch’s investment philosophy can be summarized by saying that it is the ability to generate free cash flow that makes a company worth something to begin with, and it is how management allocates that free cash flow that determines whether the value of the business rises or falls. In this paper, we address the former of this…
Does a stock’s price and its P/E ratio tell you how much a company is worth? Conventional wisdom says yes, but we think otherwise. This paper explores further.
In Wall Street parlance a “tenbagger” is a stock in which you’ve made ten times your money. Investors who talk about tenbaggers tend to be looked at with suspicion. They’re either trying to sell a book or sign people up to a newsletter that promises untold riches. However, investors who talk about tenbaggers in Europe tend…
This 42-page paper by Candriam examines the key role the transportation and energy sectors play in the sustainable energy transition. It asks the question: can automobiles change the world?
Several major equity benchmark providers maintain rules-based defensive equity portfolios they call indexes – but they shouldn’t be confused with their cap-weighted counterparts. We take a closer look at what options exist and how they differ, their viability as passive investments and how they might be improved, and how to…
Several major equity benchmark providers maintain rules-based defensive equity portfolios they call indexes – but they shouldn’t be confused with their cap-weighted counterparts. We take a closer look at what options exist and how they differ, their viability as passive investments and how they might be improved, and how to…
Factor investing is an important means of enhancing returns in portfolios. However, not everyone fully understands how different factors have different effects, or how multi-factor solutions work. Robeco has therefore created a dedicated educational module which explains the Essentials of Factor…
Adam Berger of Wellington Management asks two pertinent questions: Should investors be patient with value stocks and international equity diversification? Where do China A-shares fit in an emerging markets portfolio? Read his thoughts here.
Among other things, this 32-page issue of Risk & Reward examines how to take a factor-based approach to diversifying oil exposure. Oil investors, fixed income investors and sovereign wealth funds are the main focus of this issue.
With the maturation of defined benefit pension plans, many have reached an inflection point where cash flows are turning from positive to negative. This is causing a greater emphasis to be placed on income in asset allocation decisions. Income from bonds, however, has withered while alternative sources of income come with…
Diversification is the foundation of modern portfolios, described by Nobel laureate Harry Markowitz as ‘the only free lunch’ for investors. But could the trend towards investing according to environmental, social, and governance (ESG) principles undermine diversification? Our new research explores this important question and…
This publication shows that recent underperformance is not the result of a deterioration in factor performance, since it has been possible to offset negative performance for some factors through the good performance of other factors, but relates more to the implementation choices of the factor exposures than to the factors…
Many equity investors want to help create social benefits while generating strong returns. Achieving these twin goals requires a coherent investment approach. In this paper, we outline a process designed to effectively integrate environmental, social and governance factors in a sustainable equity strategy. Using stock…
This report adds institutional accounts to the mutual funds analyzed in the S&P Indices Versus Active (SPIVA) U.S. Scorecards. It also examines the impact of fees.
Low-carbon and factor-based investing are two key trends in the global investment management industry. This paper investigates the impact of low-carbon screening on traditional market-cap-weighted portfolios and factor portfolios (quality, value, momentum, and low volatility) across seven Asian markets: Australia, China,…
Among other things, this 32-page issue of Risk & Reward examines how to take a factor-based approach to diversifying oil exposure. Oil investors, fixed income investors and sovereign wealth funds are the main focus of this issue.
Factor investing has never been as popular as it is today. However, with the propagation of this type of investment approach, the equity space is becoming increasingly saturated with more and more factors that are ever more removed from academically-grounded research. This paper discusses factor definitions used in…
