Many studies have compared the performance of value stocks to those of growth stocks. Value investing is based on the ability to pick up the right undervalued stocks, generally mature companies, presenting though a sound business value. Instead, growth investing focuses on young companies that present high growing opportunities. This paper shows that value portfolios outperform the growth ones in all the four methodologies specifically implemented, thus leading to assume a strong value effect. The analysis is conducted on portfolios which are rebalanced on a yearly basis, considering the European Monetary Union (EMU) market as a reference, so to avoid different currencies issues. The insights identified in this paper can be used by corporate management to analyze the effects of the different kinds of strategies they are going to implement. This paper deals with a key management dilemma by addressing managers in the analysis of the selection process,pointing out the pros and cons of both value and growth investing.

Value vs. Growth investment strategies. An empirical analysis in the European context

Emanuele Teti
;
Maurizio Dallocchio;
2019

Abstract

Many studies have compared the performance of value stocks to those of growth stocks. Value investing is based on the ability to pick up the right undervalued stocks, generally mature companies, presenting though a sound business value. Instead, growth investing focuses on young companies that present high growing opportunities. This paper shows that value portfolios outperform the growth ones in all the four methodologies specifically implemented, thus leading to assume a strong value effect. The analysis is conducted on portfolios which are rebalanced on a yearly basis, considering the European Monetary Union (EMU) market as a reference, so to avoid different currencies issues. The insights identified in this paper can be used by corporate management to analyze the effects of the different kinds of strategies they are going to implement. This paper deals with a key management dilemma by addressing managers in the analysis of the selection process,pointing out the pros and cons of both value and growth investing.
Teti, Emanuele; Dallocchio, Maurizio; Tamburnotti, Tommaso
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11565/4029455
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