Abstract
We focus on testing stock market multiples on equity markets in order to evaluate the “market performances” of the valuation tools practitioners deal with in their routine equity research analysis. Our goal has been twofold: analyzing the performance of commonly used multiples in predicting the market price of a set of liquid and highly traded US stocks, and then employing these results to test profitable stock picking strategies.
Our results can be very useful for practitioners to determine those industries in which valuation errors, using multiple metrics, can be expected as larger and more dispersed so that the value added contribution of relative valuation in the explanation of market prices becomes poorer.
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Rossi, E., Forte, G. (2016). Conclusion. In: Assessing Relative Valuation in Equity Markets. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-56335-4_6
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DOI: https://doi.org/10.1057/978-1-137-56335-4_6
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Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-56334-7
Online ISBN: 978-1-137-56335-4
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