For many investors, “growth” means how much and how consistently a company can increase its sales and earnings. These investors care little about the academic designations of “growth” and “value” based on the ratio of stock prices to net assets, aka “book value.” (See “B400 Index Tilts Strongly to Growth Based on P/B Ratios”.) [...]John A. Prestbo
Barron’s 400 Diary
The Barron’s 400 Diary offers commentary on the Barron’s 400 Index — its composition, performance and characteristics — as well as insights that this unique Growth at a Reasonable Price (GARP) Index provides on the U.S. stock market in general.
In terms of growth vs. value, the Barron’s 400 leans distinctly toward the growth end of the spectrum. This trait might have been surmised from the very essence of the index—tracking companies that are financially strong. However, there is no law against the market punishing the stock of a company in good financial shape and making it [...]John A. Prestbo
The Barron’s 400 outperformance so far this year can be traced to the intersection of size and sector. Previous posts have noted how size can affect performance (Size Matters, Even for an Equally Weighted Index), as does the sector makeup of an index (Consumer Discretionary Stocks Account for 40% of B400’s Gain This Year). When these two [...]John A. Prestbo
People like to pigeonhole indexes. It’s large-cap or small-cap, they say for example, referring to the market capitalization values of the components. The Barron’s 400 is not so easily categorized, however. This post begins a series of diary entries that focus on various characteristics of the Barron’s 400 Index. The goal is to provide [...]John A. Prestbo
Stocks selected for the Barron’s 400 are all in great shape, financially speaking. But that doesn’t mean they all perform “great” in the market. MarketGrader analyzes a company according to its growth trajectory, whether its stock is relatively cheap or expensive, its profit-margin growth and return on shareholder equity, and how it [...]John A. Prestbo
Like many other stock-market indexes, the Barron’s 400 Index is setting records this spring. But it is doing so in its own unique way. That’s because the Barron’s 400 doesn’t look like other indexes. Its component stocks are from companies that MarketGrader has analyzed as being among the financially strongest in the country. As a [...]John A. Prestbo