Value vs. Glamour Revisited: Historical P/B Ratio Disparities and Subsequent Value Stock Outperformance
11 Pages Posted: 10 Aug 2011
Date Written: September 1, 2009
The Brandes Institute recently revisited its Value vs. Glamour research, focusing on the relationship between the valuation difference in price-to-book ratios, and subsequent relative performance. The Institute discovered that, historically, when the difference in P/B ratios between value and glamour stocks was at or near its peak, value stocks delivered meaningful out-performance over the subsequent 5-year period. This article documents the recent expansion in the gap between median P/B ratios for value and glamour stocks and examines the implications for investors.
Keywords: Brandes, Brandes Institute, value investing, value vs glamour
JEL Classification: G10, G11, G12, G14
Suggested Citation: Suggested Citation