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

Abstract

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

Institute, Brandes, Value vs. Glamour Revisited: Historical P/B Ratio Disparities and Subsequent Value Stock Outperformance (September 1, 2009). Brandes Institute Research Paper No. 05, 2009. Available at SSRN: https://ssrn.com/abstract=1905613 or http://dx.doi.org/10.2139/ssrn.1905613

Brandes Institute (Contact Author)

Brandes Investment Partners ( email )

11988 El Camino Real, Suite 500
P.O. Box 919048
San Diego, CA 92191-9048
United States

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