A Contrarian Strategy for Growth Stock Investing: Theoretical Foundations and Empirical Evidence

Front Cover
Bloomsbury Academic, 1993 - Business & Economics - 177 pages

Relatively few academics or practitioners have systematically explored growth stocks. Growth stocks usually involve exciting companies whose sales and earnings are growing significantly faster than other companies and the economy in general. This book finds that high expectation growth stocks or the ones that everyone loves have poor relative returns. Low expectation growth stocks, however, have strong performance. The author uses the PE/GROWTH ratio to rank the market's expectations for these stocks.

The book shows how investors may be able to ascertain whether the interests of a public company's management are aligned with those of shareholders. Sophisticated and institutional investors will find the book's thorough analysis and insightful perspective on growth stocks very informative. The short-term mean reverting aspects of growth stocks are uncovered, and other market microstructure anomalies are discussed. The work addresses practical trading ideas and the need for diversification. Ideal as supplemental reading for courses in investment management and finance, this book examines the components of trading costs and presents arguments for a patient trading style.

From inside the book

 

Contents

What Is a Growth Stock?
1
A Hypothesis about the Markets Pricing of Growth Stocks
11
Market Expectations and Responses to New Information
33
Copyright

9 other sections not shown

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A Contrarian Strategy for Growth Stock Investing: Theoretical Foundations ...
Donald Peters
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Common terms and phrases

$1 Invested addition analyst coverage anomalies assets average growth stock benchmark beta brokers buyer cash flow company's competitive Conshohocken consider contrarian corporate corporation's deciles discussed dividend earnings surprises efficient equity markets estimates evaluation factors Financial Economics firm's firms forecasts fundamental analysis future Growth of $1 growth stock universe high-expectation hypothesis important incentives industry information asymmetries initial insiders International Widget Intraday investment management IPOs issues January Effect Journal of Finance Journal of Portfolio liquidity losers low-expectation growth stocks manager's market capitalization market impact market's information set ment money managers one's outperforms patterns PE/GROWTH ratios percent period plan sponsor Portfolio Management Portfolios Based position profits public companies quintile regarding relative performance return reversal revisions Richard Roll Richard Thaler risk seller shareholders small stocks stock price Stock Returns strategy Table tion transaction costs upstairs market valuation volatility Wall Street Journal Yr Yr

About the author (1993)

DONALD J. PETERS is a portfolio manager at Geewax, Terker & Co., a Philadelphia area investment counseling firm. His growth-stock research has been published in The Journal of Portfolio Management, and The Wall Street Journal. Peters is a graduate of The Wharton School and Tulane University and a member of Phi Beta Kappa.

Bibliographic information

TitleA Contrarian Strategy for Growth Stock Investing: Theoretical Foundations and Empirical Evidence
Praeger Series in Political
AuthorDonald Peters
PublisherBloomsbury Academic, 1993
Original fromthe University of Michigan
DigitizedNov 9, 2010
ISBN0899308031, 9780899308036
Length177 pages
Subjects ›  › 

Business & Economics / Finance / General
Business & Economics / General
  
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