Earnings acceleration—a change in the velocity of growth—indicates something is affecting a company’s business prospects. Identifying that force has been a cornerstone of our growth investment process for more than 30 years.
Our Global Growth Equity Desk expanded the scope of analysis to determine the continued viability of earnings acceleration as a potential source of significant, durable and diversifying excess returns. Does the data still stand up?
Research Highlights:
- Percent of companies with positive earnings over time
- Distribution of accelerating companies by sector
- Excess returns over MSCI ACWI Index
- Excess returns by region and decile
- Correlation of an earnings acceleration portfolio to three equity factors: momentum, value and size