Out-of-favor stocks will exhibit low prices relative to various proxies for intrinsic value such as earnings. Because

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Out-of-favor stocks will exhibit low prices relative to various proxies for intrinsic value such as earnings. Because of regret avoidance, these stocks will need to offer a more attractive rate of return to induce investors to hold them. Thus, low P/E stocks might on average offer higher rates of r eturn. LO.1 

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Essentials Of Investments

ISBN: 9780697789945

8th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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