Backing dominant firms in Asia makes sense but identifying their successors provides real alpha

New sectors provide uncertainty

clock • 4 min read
Backing dominant firms in Asia makes sense but identifying their successors provides real alpha

Backing a sector winner is a logical strategy but identifying its heirs is a more challenging alpha generator.

Detailed analysis of stock return profiles shows that companies improving their return on equity (RoE) from the lower quartile to the top tend to outperform in the long term. Selecting these businesses...

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