CHH - By The Numbers: Investing Ideas Based On Profitability Value And Momentum
There is no infallible formula to pick winning stocks, however, statistical data shows that companies offering some specific quantitative attributes tend to outperform the markets in the long term. Among other factors, research has proven that profitability, valuation, and momentum are some of the most effective and robust return drivers.
Regarding profitability, it's quite easy to understand why companies that make high returns on capital tend to be superior investments. A stock is ultimately a share in an ownership of a business. All else the same, the more profitable the business, the more profitable an