BUSI 4502 Study Guide - Final Guide: Performance Metric, Social Science Research Network, Human Capital
30 Aug 2018
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Document Summary
Analyzing valuation measures wesley gray and jack vogel. This article compares the investment performance of portfolios sorted on different valuation measures. They would like to determine if the valuation metrics are created equally. The participated valuation measures are e/m, ebitda/tev, fcf/tev, The findings are based on study of stock return of firms from. It is found that ebita/tev have the best performing metric and outperformed other valuation metrics used. It also explores the investment potential of long-term valuation ratio, which replaces one-year earnings with an average of long term earnings. It is found that long-term ratio add little investment value over standard one year valuation metrics. In conclusion, ebita/tev is found the best performing metric and. As for analysis of periods of economic contraction and expansion, all valuation measure performed equally but valuation-based strategies outperformed the market in both economic environments.
