Price-to-Earning Growth Ratio and Value vs. Growth Based Strategies: Some European Evidences

16 Pages Posted: 4 Feb 2004

See all articles by Salim Chahine

Salim Chahine

American University of Beirut - Olayan School of Business; European Corporate Governance Institute (ECGI)

Taufiq Choudhry

Bradford University School of Management

Abstract

While recent studies have concentrated on why value outperforms growth, this paper verifies whether over performance level has changed over the recent period within the euro-zone, and whether these strategies are sensitive to earnings growth level, country or industry factors. Results show that a value strategy with a high earnings growth rate over performance the growth strategies for the euro zone. The strategy of selling short shares with a price to earning growth (PEG) ratio higher than one and buying shares with a PEG ratio less than one out performs other strategies.

Suggested Citation

Chahine, Salim and Choudhry, Taufiq, Price-to-Earning Growth Ratio and Value vs. Growth Based Strategies: Some European Evidences. Available at SSRN: https://ssrn.com/abstract=498306 or http://dx.doi.org/10.2139/ssrn.498306

Salim Chahine

American University of Beirut - Olayan School of Business ( email )

Bliss Street
Beirut 1107 2020
Lebanon
961-1-374-374 (Phone)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Taufiq Choudhry

Bradford University School of Management ( email )

Emm Lane
Bradford, West Yorkshire Bd9 4JL
United Kingdom
+44 (0)1274 234363 (Phone)
+44 (0)1274 235680 (Fax)

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