Value Investing for Technology Companies

Research Article
Open access

Value Investing for Technology Companies

Qizheng Cui 1*
  • 1 Kings College London    
  • *corresponding author K21053072@kcl.ac.uk
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/15/20230931
AEMPS Vol.15
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-73-7
ISBN (Online): 978-1-915371-74-4

Abstract

Electronic products are constantly flooding our lives. More and more technology companies invest more capital to research electronic products. This paper analyses the data for five representative US technology companies from year 2015 to 2021, from a value investing perspective. Specifically, this paper looks at factors like profitability, valuation, growth, pay out and returns. By analysing those factors with historical data, this paper looks at the value changes and explain the possible reason behind. This paper further compares each of those factors across the five companies and it is concluded that Apple Inc ranks the first and worth to invest in our five-company portfolio. Dell, being the second the best choice, rank ahead of other three companies by a large margin. This paper suggest that one can have APPL and Dell in the portfolio but not to invest the other three companies.

Keywords:

value investing, technology, Apple, Dell

Cui,Q. (2023). Value Investing for Technology Companies. Advances in Economics, Management and Political Sciences,15,279-286.
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References

[1]. Fama, E., French, K.: A Five-Factor Asset Pricing Model. Journal of Financial Economics, 116, 1-22(2015).

[2]. Fama, E., French, K.: The Cross-Section of Expected Stock Returns. Journal of Finance, 47(2), 427-465(1992).

[3]. Ang, A., Chen, J.: CAPM over the Long Run. Journal of Empirical Finance, 1-40(2007).

[4]. Banz, R.: The Relationship between Return and Market Value of Common Stocks. Journal of Financial Economics, 9(1), 3-18 (1981).

[5]. Fama, E., French, K.: Common risk factors in the returns on stocks and bonds. Journal of Financial Economics, 33, 3-56(1993).

[6]. Introduction to the profitability, https://www.msci.com/documents/10199/2ef5bba7-8448-44da-bdb3-0a102374c8d3, last accessed 2022/10/1.

[7]. Novy-Marx, R.: The other side of value: The gross profitability premium. Journal of financial economics, 108(1), 1-28 (2013).

[8]. GROWTH:FACTORINVESTINGSINNING? https://insights.factorresearch.com/research-growth-factor-investing-sinning/, last accessed 2022/10/1.

[9]. Focus: Growth. https://www.msci.com/documents/1296102/8473352/MSCI-SingleFactor-Growth.pdf, last accessed 2022/10/1..

[10]. MSCI Yield Factor Brochure, https://www.msci.com/documents/1296102/8473352/Yield-brochure.pdf, last accessed 2022/10/1.

[11]. Jegadeesh, N., Titman, S.: Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency. Journal of Finance, 48(1), 65-91(1993).

[12]. Bouchaud, J.-P., Farmer, J. D., Lillo, F.: How Markets Slowly Digest Changes in Supply and Demand. Handbook of Financial Markets: Dynamics and Evolution, 57-160 (2009).

Cite this article

Cui,Q. (2023). Value Investing for Technology Companies. Advances in Economics, Management and Political Sciences,15,279-286.

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The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-73-7(Print) / 978-1-915371-74-4(Online)
Editor：Javier Cifuentes-Faura, Canh Thien Dang
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.15
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Fama, E., French, K.: A Five-Factor Asset Pricing Model. Journal of Financial Economics, 116, 1-22(2015).

[2]. Fama, E., French, K.: The Cross-Section of Expected Stock Returns. Journal of Finance, 47(2), 427-465(1992).

[3]. Ang, A., Chen, J.: CAPM over the Long Run. Journal of Empirical Finance, 1-40(2007).

[4]. Banz, R.: The Relationship between Return and Market Value of Common Stocks. Journal of Financial Economics, 9(1), 3-18 (1981).

[5]. Fama, E., French, K.: Common risk factors in the returns on stocks and bonds. Journal of Financial Economics, 33, 3-56(1993).

[6]. Introduction to the profitability, https://www.msci.com/documents/10199/2ef5bba7-8448-44da-bdb3-0a102374c8d3, last accessed 2022/10/1.

[7]. Novy-Marx, R.: The other side of value: The gross profitability premium. Journal of financial economics, 108(1), 1-28 (2013).

[8]. GROWTH:FACTORINVESTINGSINNING? https://insights.factorresearch.com/research-growth-factor-investing-sinning/, last accessed 2022/10/1.

[9]. Focus: Growth. https://www.msci.com/documents/1296102/8473352/MSCI-SingleFactor-Growth.pdf, last accessed 2022/10/1..

[10]. MSCI Yield Factor Brochure, https://www.msci.com/documents/1296102/8473352/Yield-brochure.pdf, last accessed 2022/10/1.

[11]. Jegadeesh, N., Titman, S.: Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency. Journal of Finance, 48(1), 65-91(1993).

[12]. Bouchaud, J.-P., Farmer, J. D., Lillo, F.: How Markets Slowly Digest Changes in Supply and Demand. Handbook of Financial Markets: Dynamics and Evolution, 57-160 (2009).

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