Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

What makes a successful stock? Investigating the characteristics of the "winning bets" stocks in the FTSE100

Mehmed, Mustafa LU and Mohamad Diwani, Mazen LU (2010) NEKM07 20101
Department of Economics
Abstract
Using quarterly data on 55 UK domiciled companies within the FTSE100 collected from DataStream database covering the period 1991-2009, we investigate which factors are distinguished between financially successful and less successful companies. In this study, portfolio analysis and OLS regression were performed upon the theoretical concepts of financial variables. Financial success is measured by application by using two different methods, the Sharpe ratio and Jensen´s Alpha. We have accounted a total of six different company specific characteristics as potential indicators of superior financial performance. Particularly of interest was to discern the relationship between performance measurement indicators and company characteristics were... (More)
Using quarterly data on 55 UK domiciled companies within the FTSE100 collected from DataStream database covering the period 1991-2009, we investigate which factors are distinguished between financially successful and less successful companies. In this study, portfolio analysis and OLS regression were performed upon the theoretical concepts of financial variables. Financial success is measured by application by using two different methods, the Sharpe ratio and Jensen´s Alpha. We have accounted a total of six different company specific characteristics as potential indicators of superior financial performance. Particularly of interest was to discern the relationship between performance measurement indicators and company characteristics were studied. The results indicate that large scaled profitable companies, with efficient working capital management and with short cash conversion cycles outperform the sample average on the Jensen´s alpha while companies with efficient working capital management outperform the sample average Sharpe ratio. (Less)
Please use this url to cite or link to this publication:
author
Mehmed, Mustafa LU and Mohamad Diwani, Mazen LU
supervisor
organization
course
NEKM07 20101
year
type
H2 - Master's Degree (Two Years)
subject
keywords
UK markets, FTSE100, financial indicators, financial performance, Successful companies, Sharpe index ratio, Jensen´s alpha
language
English
id
1731297
date added to LUP
2010-12-14 09:00:19
date last changed
2011-04-27 13:20:33
@misc{1731297,
  abstract     = {{Using quarterly data on 55 UK domiciled companies within the FTSE100 collected from DataStream database covering the period 1991-2009, we investigate which factors are distinguished between financially successful and less successful companies. In this study, portfolio analysis and OLS regression were performed upon the theoretical concepts of financial variables. Financial success is measured by application by using two different methods, the Sharpe ratio and Jensen´s Alpha. We have accounted a total of six different company specific characteristics as potential indicators of superior financial performance. Particularly of interest was to discern the relationship between performance measurement indicators and company characteristics were studied. The results indicate that large scaled profitable companies, with efficient working capital management and with short cash conversion cycles outperform the sample average on the Jensen´s alpha while companies with efficient working capital management outperform the sample average Sharpe ratio.}},
  author       = {{Mehmed, Mustafa and Mohamad Diwani, Mazen}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{What makes a successful stock? Investigating the characteristics of the "winning bets" stocks in the FTSE100}},
  year         = {{2010}},
}