Version 1
: Received: 21 April 2023 / Approved: 23 April 2023 / Online: 23 April 2023 (03:21:24 CEST)
How to cite:
Pfister, N.; Kendzia, M. J. Outperforming the S&P 500 through Investment Plays. Preprints2023, 2023040739. https://doi.org/10.20944/preprints202304.0739.v1
Pfister, N.; Kendzia, M. J. Outperforming the S&P 500 through Investment Plays. Preprints 2023, 2023040739. https://doi.org/10.20944/preprints202304.0739.v1
Pfister, N.; Kendzia, M. J. Outperforming the S&P 500 through Investment Plays. Preprints2023, 2023040739. https://doi.org/10.20944/preprints202304.0739.v1
APA Style
Pfister, N., & Kendzia, M. J. (2023). Outperforming the S&P 500 through Investment Plays. Preprints. https://doi.org/10.20944/preprints202304.0739.v1
Chicago/Turabian Style
Pfister, N. and Michael J. Kendzia. 2023 "Outperforming the S&P 500 through Investment Plays" Preprints. https://doi.org/10.20944/preprints202304.0739.v1
Abstract
Academic and corporate research has been focusing on analyzing stock performances, financial markets, and investment strategies for decades. According to Lynch and Rothchild (1989), certain investments can be described as plays. In this work, the authors use the term for investments in value stocks, spin-offs, and turnarounds to analyze the long-term stock performance and risk-adjusted excess returns of up to five years for those stocks. Additionally, stocks with a supe-rior return performance are identified within an investment play based on low P/E and P/B mul-tiples. The study finds that value stocks, spin-offs, and turnarounds outperform the S&P 500 on average on a one-, three- and five-year investment horizon. The analysis of the three investment plays confirms earlier studies that investment plays constitute a profitable investment opportunity. Moreover, the research exemplifies that private investors could achieve an excess return (alpha) through a passive buy-and-hold investment strategy. Overall, the analysis provides a deeper in-sight into the long-term performance of value stocks, spin-offs, and turnarounds.
Keywords
Value stocks; spin-offs; turnarounds; P/E ratio; P/B ratio
Subject
Business, Economics and Management, Finance
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
