Review of stock returns

Almutairi Aned O., Anton Abdulbasah Kamil, Almutairi Alya O.

Abstract


Growth in Capital expenditures also explicates returns to the portfolio and the cross section of future stock returns. Companies that substantially enlarge capital investments afterward achieve negative benchmark-adjusted returns.  The negative capital investment and return relation observed stronger for firms that have greater investment prudence, i.e., firms that have higher cash flows and lower debt ratios, and is exposed to be considerable only in time periods when aggressive takeovers were less common. Firms that amplify capital investments supposed to have high past return and issue equity at the same time as the negative capital investment and return is free of the long term return reversal and secondary equity issue anomalies.

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Almutairi Aned O., Anton Abdulbasah Kamil, Almutairi Alya O., Review of stock returns, Math. Finance Lett., 2013 (2013), Article ID 3

Copyright © 2013 Almutairi Aned O., Anton Abdulbasah Kamil, Almutairi Alya O.. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


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