"key findings:
- We find a simple investment strategy of buying an equally weighted portfolio of each year’s U.S. large BPTW winners outperforms the S&P 500 index in nine of the 11 years we examined. On average, stocks of BPTW winners earned 20.3 percent per year between 2009 and 2019, compared to 12.9 percent for the S&P 500.
- Three industry sectors lead in terms of stock performance among BPTW companies: Retail (40.5 percent average annual return in the year after award recognition); professional and business services (28.3 percent); and information technology (24.7 percent). The lowest stock returns among award winners were found in more traditional sectors of the economy: Construction, repair and maintenance (-1.4 percent); oil, gas, energy and utilities (3.9 percent); and insurance (4.4 percent).
- Consistent with the growing academic literature that finds a link between employee culture and business performance, we find that stocks of publicly-traded winners of Glassdoor’s Best Places to Work award historically outperformed the U.S. stock market in most years."
When it comes to valuing a company, it seems that people tend to just look at balance sheets. And completely ignore the people that actually make up the company. The CEO, management team, and the engineers that are responsible for making the company grow.
When you think about it, when you invest you're ultimately giving it to the CEO and his employees to manage. So maybe one should start there first, and then work backwards to determine whether or not the investment is a potential 10Xer.
For example people were constantly calling Amazon overpriced in the 90s and late 00s just based on balance sheets. But ignored the fact that Jeff Bezos was the one leading the company. Constantly innovating Amazon, hiring the best engineers, and creating a company culture of innovation. The same could be said about Jack Dorsey and Square, Elon Musk and Tesla and so on.
Submitted February 14, 2021 at 10:17PM by Okmanl https://ift.tt/2ZgSdD3
