Earnings acceleration—a change in the velocity of growth—indicates something is affecting a company’s business prospects. Focusing on that force has been a cornerstone of our growth investment process for more than 30 years.
Our Global Growth Equity Desk expanded the scope of analysis to determine the continued viability of earnings acceleration as a potential source of significant, durable and diversifying excess returns. Does the data still stand up?
- Percent of companies with accelerating earnings over time
- Distribution of accelerating companies by sector
- Excess returns over MSCI ACWI Index
- Excess returns by region and decile
- Correlation of an earnings acceleration portfolio to three equity factors: momentum, value and size
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Diversification does not assure a profit nor does it protect against loss of principal.
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