Interaction between Value Line's Timeliness and Safety Ranks

“Interaction Between Value Line’s Timeliness and Safety Ranks,” Doug Waggle, Pankaj Agrrawal, and Don Johnson, Journal of Investing, Vol. 10 (1), Spring 2001.

Posted: 3 Aug 2015

See all articles by Doug Waggle

Doug Waggle

University of West Florida

Pankaj Agrrawal

University of Maine

Don T. Johnson

Western Illinois University - Department of Marketing and Finance

Date Written: 2001

Abstract

The Value Line Investment Survey, with its well-known timeliness and safety rankings, has managed to generate a superior performance record over time. The authors' findings show that Value Line's timeliness ranks were significant predictors of success during our study period, even when several other key financial and market characteristics are considered. The timeliness ranks, however, appear to be biased toward the selection of securities with above-average market risk, even when controlling for safety level. The authors conclude that individual investors should not use Value Line's safety ranks to assess risk, but should instead focus on security betas. Following Value Line's recommended strategy would lead investors to large market-capitalization stocks with significant price and earnings growth momentum. Despite the "value" in its title, Value Line certainly does not recommend value stocks.

Keywords: Value Line, VLIS, timeliness, safety rankings, portfolios, risk

JEL Classification: g

Suggested Citation

Waggle, Doug and Agrrawal, Pankaj and Johnson, Don T., Interaction between Value Line's Timeliness and Safety Ranks (2001). “Interaction Between Value Line’s Timeliness and Safety Ranks,” Doug Waggle, Pankaj Agrrawal, and Don Johnson, Journal of Investing, Vol. 10 (1), Spring 2001., Available at SSRN: https://ssrn.com/abstract=2639040

Doug Waggle

University of West Florida ( email )

11000 University Parkway
Pensacola, FL 32514-5750
United States

Pankaj Agrrawal (Contact Author)

University of Maine ( email )

Orono, ME 04469
United States

Don T. Johnson

Western Illinois University - Department of Marketing and Finance ( email )

Stipes Hall 430
Macomb, IL 61455-1390
United States
309-298-1026 (Phone)
309-298-2198 (Fax)

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