 The financial ratio usage towards predicting stock returns in MalaysiaMohamad Jais, Shaharudin Jakpar, Tan Kia Puai Doris and Junaid M. Shaikh International Journal of Managerial and Financial Accounting, 2012, vol. 4, issue 4, 377-401 Abstract: This paper examines whether a simple fundamental analysis strategy based on historical accounting information can predict stock returns. Construction and material sector are chosen in this study. Five common stock return predictor used in this study are price earning (PE), return of equity (ROE), debt to equity (DE), earning growth (EG) and price to net tangible asset (P/NTA). The results show that historical accounting signals are able to predict stock return. The mature group firm outperformed new and stable firm in predictive power. The finding reveals that nearly all return predictor have positive correlation with future stock return. Despite the down activity of the market over the sample period chosen, results reveal that fundamental accounting signals of winner portfolio that provide positive future return from a loser one generating a negative return still be able to generate positive return. Keywords: financial ratio; stock return prediction; stock returns; future earnings; accounting signals; portfolio; Malaysia; historical accounting information. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:injmfa:v:4:y:2012:i:4:p:377-401 Access Statistics for this article More articles in International Journal of Managerial and Financial Accounting from Inderscience Enterprises Ltd |
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