Discover a new approach to Systematic Value Investing with Visible Alpha’s report:
Finding Value in Analyst Estimates for Systematic Value Investors
Value investing is a storied strategy that involves buying (long) stocks that appear cheap relative to their intrinsic value, often proxied by fundamental data from financial statements. This concept led many institutions to adopt some form of value investing. But what happens when conventional wisdom seems to falter, as growth stocks soar beyond expectations and the validity of value investing comes into question?
By integrating sell-side analyst expectations into the equation, Visible Alpha’s data science team provides a unique perspective into the underperformance of the value factor. Our research has unearthed a tendency of value investing to unintentionally select “value trap” stocks – stocks that only appear cheap and bets against growth stocks for which analysts have the highest expectations after a deep analysis of the fundamentals.
In the ever-changing landscape of investments, avoiding the “value trap” is crucial. Navigate the complexities of investing with Visible Alpha’s report on systematic value investing – a powerful antidote to the “value trap.”
What you’ll discover:
- The power of analyst expectations of a stock’s return on average equity (RoE) in generating alpha and fine-tuning systematic value strategies.
- Methods to address prevalent criticisms of value investing, while exploring forward-looking measures such as earnings-to-market and revenue-to-market to unveil the true potential of value vs. growth stocks.
- The influence of intangible assets in today’s market and how to enhance your perception of intangible book-to-market measures.
- A systematic approach to detect and avoid value traps through the strategic use of analyst expectations of returns.
With this report and the exclusive access to the codebase* used in the analysis, you’ll gain insights into an innovative methodology for systematic value investing to help fortify your investment strategy against potential risks.
*The full codebase for this analysis is available via Visible Alpha Insights. Clients can access the codebase here. For all others, please contact our sales team.
