The Profitability of EP Trading Rule Based on Operating Income

Kang, Tony
June 2003
American Business Review;Jun2003, Vol. 21 Issue 2, p41
Academic Journal
Discusses the profitability of earnings-to-price (EP) trading rule based on operating income. Investigation of whether the return predictability of the two ratios are due to their correlation with known risk proxies; Implications to the investment community and accounting standards setters.


Related Articles

  • Investors get a second shot. De Klerk, Vic // Finance Week;2/9/2004, p21 

    Reports that South African company Howden's share price has doubled since September 2003. Profit for the full financial year that ended December 2003; Opportunity for investors who like small-capitalization companies; Design and marketing of a wide range of specialized air, gas, and liquid...

  • A Steep Price for No Growth. Breen, Mike // Morningstar FundInvestor;Jan2010, Vol. 18 Issue 5, p11 

    The article presents some of the portfolios which have high price/earning (P/E) ratios and profitable holdings, but have had declining revenues. It states that Fidelity Contrafund FCNTX, Fidelity Magellan FMAGX, and Fidelity Growth Discovery FDSVX are large-growth funds with negative sales...

  • Problems casting N-shares adrift. Harris, Shaun // Finance Week;3/24/2003, p25 

    Comments on the growth targets and strategies of South Africa-based Grindrod in 2003. Improvement of price-earnings ratio; Increase in earnings; Improvement of the firm's liquidity.

  • Decomposing the price-earnings ratio. Anderson, Keith; Brooks, Chris // Journal of Asset Management;Mar2006, Vol. 6 Issue 6, p456 

    The price-earnings (P/E) ratio is a widely used measure of the expected performance of companies, and it has almost invariably been calculated as the ratio of the current share price to the previous year's earnings. The P/E of a particular stock, however, is partly determined by outside...

  • WHAT NUMBER MATTERS MOST? Birger, Jon // Money;Sep2002, Vol. 31 Issue 9, p98 

    Focuses on statistics which best predict future stock returns. Work of strategists at Merrill Lynch; Belief that the price-earnings ratio is the valuation metric most consistently predictive of future earnings; Lack of confidence of investors in reported earnings of corporations due to...

  • Crain's picks top '08 stocks. Elstein, Aaron // Crain's New York Business;1/7/2008, Vol. 24 Issue 1, p3 

    The article reports on the selection of the top 2008 stocks by "Crain" in New York. Reuter Fundamentals was asked to identify profitable area companies whose shares traded at less than the Standard & Poor 500 average price-earnings ratio for the past 12 months. Candidates were asked to show...

  • In the pinks. Popplewell, Keith // Money Marketing;1/24/2002, p44 

    Focuses on the valuation and pricing of investment trusts and their deviations. Important items to understand the behavior of different equity-based funds; Profits posted by Abacus Construction in 2001; Summary of price/earnings.

  • Poor performance at the top. De Klerk, Vic // Finance Week;7/7/2003, p8 

    Focuses on the profit prospects of top South African companies listed on the Johannesburg Securities Exchange. Price-earnings ratio; Analysis of the Sasol, Anglo American, Absa and Standard Bank stocks; Relation between interest rates and investment ratings.

  • Determining optimum P/E ratio regarding the risk and return in Iran Stock Exchange using goal programming. Afkhami, Adel; Hashemi, Mansoureh H. // International Proceedings of Economics Development & Research;2011, Vol. 21, p85 

    Investors usually try to find best ways and models to get the best decisions in the capital markets. So they use some tools for evaluating the overall situation of their choices. In this way, the price-earnings ratio has received considerable attention within the broader field of finance....


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics