Objective research to aid investing decisions

Value Investing Strategy (Strategy Overview)

Allocations for August 2022 (Final)
Cash TLT LQD SPY

Momentum Investing Strategy (Strategy Overview)

Allocations for August 2022 (Final)
1st ETF 2nd ETF 3rd ETF

Best Brands Investment Performance

July 25, 2022 • Posted in Fundamental Valuation, Sentiment Indicators

Do the Best Brands, as published annually by¬†Interbrand based on net present value of predicted incremental earnings due to brand, offer superior investment performance due to pricing power and superior operating practices? In their June 2022 paper entitled “Is Buffett Right? Brand Values and Long-run Stock Returns”, Hamid Boustanifar and Young Dae Kang examine the investment performance of Best Brands. Best Brands companies must be global, have publicly available financial data, be visible and have the expectation of positive long-term profitability above the cost of capital). Up to 2007 (subsequently), Interbrand published Best Brand lists in July or August (late September or October). The authors each year reform a Best Brands portfolio limited to U.S. firms the first day of the month after publication, thereby excluding immediate announcement effects on stock prices. For stocks encompassing multiple brands (e.g., Google and YouTube for Alphabet), they map brands to stocks by summing brand values. Using firm characteristics, accounting data and stock prices for a broad sample of U.S. stocks during 2000 (the first Best Brands list) through 2020, they find that:

(more…)

Please or subscribe to continue reading...
Gain access to hundreds of premium articles, our momentum strategy, full RSS feeds, and more!  Learn more

Daily Email Updates
Login
Questions?