Beating the Odds - Investigating the Predictors of Stock Price Superiority in Swedish High-Quality Companies
(2024) NEKH02 20241Department of Economics
- Abstract
- The fundament of the efficient market hypothesis is that no historical information can be used to predict stock returns. Despite this, so-called quality investing is a popular practice and a strategy that has generated above-average market returns. By analysing Swedish high- and low- quality companies, this study aims to answer the relationship between certain financial metrics and stock returns. Further on, this study defines high-quality companies that, on average, generate results greater than low-quality companies. High-quality companies are shown to have a strong positive correlation to the growth rate in the EV/EBIT multiple and a weak but positive relationship to ROA. Low-quality companies have a weak positive relationship to the... (More)
- The fundament of the efficient market hypothesis is that no historical information can be used to predict stock returns. Despite this, so-called quality investing is a popular practice and a strategy that has generated above-average market returns. By analysing Swedish high- and low- quality companies, this study aims to answer the relationship between certain financial metrics and stock returns. Further on, this study defines high-quality companies that, on average, generate results greater than low-quality companies. High-quality companies are shown to have a strong positive correlation to the growth rate in the EV/EBIT multiple and a weak but positive relationship to ROA. Low-quality companies have a weak positive relationship to the growth rate in EV/EBIT. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9155370
- author
- Windahl, Emil LU and Fries, Adrian LU
- supervisor
- organization
- course
- NEKH02 20241
- year
- 2024
- type
- M2 - Bachelor Degree
- subject
- keywords
- High-quality, stock price, quality investing, predictability of stock price, EMH
- language
- English
- id
- 9155370
- date added to LUP
- 2024-09-24 09:00:34
- date last changed
- 2024-09-24 09:00:34
@misc{9155370, abstract = {{The fundament of the efficient market hypothesis is that no historical information can be used to predict stock returns. Despite this, so-called quality investing is a popular practice and a strategy that has generated above-average market returns. By analysing Swedish high- and low- quality companies, this study aims to answer the relationship between certain financial metrics and stock returns. Further on, this study defines high-quality companies that, on average, generate results greater than low-quality companies. High-quality companies are shown to have a strong positive correlation to the growth rate in the EV/EBIT multiple and a weak but positive relationship to ROA. Low-quality companies have a weak positive relationship to the growth rate in EV/EBIT.}}, author = {{Windahl, Emil and Fries, Adrian}}, language = {{eng}}, note = {{Student Paper}}, title = {{Beating the Odds - Investigating the Predictors of Stock Price Superiority in Swedish High-Quality Companies}}, year = {{2024}}, }