Forbes Platinum 400 Lists for the Best Big Companies: Are They Good Investments?

Posted: 18 Aug 2012

See all articles by Salil K. Sarkar

Salil K. Sarkar

University of Texas at Arlington

Fahad Almudhaf

Kuwait University - Department of Finance and Financial Institutions

Date Written: August 17, 2012

Abstract

We find that an investor can earn abnormal profits in the long-run using Forbes Platinum list of the 400 best big companies. Our trading strategy is based on results of an event study. When using the four-factor model of Carhart (1997), our results show that buying and holding the ten lowest ranked companies in a portfolio for 36 months post-publication would generate on average positive and statistically significant abnormal return of 22.74%. Consistent with the overreaction hypothesis of De Bondt and Thaler (1985), we find low ranked companies outperform high ranked companies in the long run.

Keywords: Event study, Forbes, Best big companies, Information Content, Investment, Overreaction, mean reversion

Suggested Citation

Sarkar, Salil K. and Almudhaf, Fahad, Forbes Platinum 400 Lists for the Best Big Companies: Are They Good Investments? (August 17, 2012). Available at SSRN: https://ssrn.com/abstract=2131204

Salil K. Sarkar

University of Texas at Arlington ( email )

415 S West St Apt no 205
Arlington, TX 76013
United States

Fahad Almudhaf (Contact Author)

Kuwait University - Department of Finance and Financial Institutions ( email )

Kuwait

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