VALUE INVESTING: EVIDENCE FROM LISTED CONSTRUCTION AND INFRASTUCTURE SECTOR COMPANIES IN INDIA

Amit Hedau ()
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Amit Hedau: National Institute of Construction Management and Research, Hyderabad, India

Romanian Economic Business Review, 2020, vol. 15, issue 4, 104-114

Abstract: Earning from the stock market investment is not an easy task for any investor. Due to high volatility, it is difficult to spot the correct time for entry and to make an exit from the stock market investment. Over a period of time, many investors and researchers have discovered few strategies to generate better return from the investment. One of the strategies is value investing. It refers to identify the potential stock for investment on the basis of price-to-equity (P/E) ratio. This paper is an attempt to verify appropriateness of value investing among the listed companies from construction and infrastructure sector in India. The data is collected for nine years from April 2011 to March 2020. The stocks are classified as value stock and growth stock on the basis of P/E ratio, P/B ratio. Total 648 monthly portfolios are created and monthly rebalancing is applied to compare the returns from value portfolios and growth portfolios. Risk adjusted returns are analyzed with the help of sharpe and trenyor ratio. The findings of the study are giving mixed results. The findings of the study are neither rejecting nor showing conclusive proof towards the presence of value investing in the sample data over a period of research. The probable reasons for failure of value investing are mentioned in the conclusion section of the paper. The paper is original work of the researcher and used new criteria of P/E ratio and PB ratio as weight to create the portfolio. The study will give deeper understanding about the investing pattern suitable in the stocks of construction and infrastructure sector companies in Indi

Keywords: Value investing; Growth stock; Value stock; Construction; Infrastructure (search for similar items in EconPapers)
Date: 2020
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