Fama and French (1992) document evidence contradicting the notion that equity markets are perfectly efficient by identifying book-to-market ratio as a powerful predictor of subsequent stock returns. According to their findings, Stocks with high book value tend to outperform stocks with low book value. Stocks with low book value tend to outperform stocks with high book value. Stocks with a high ratio of book value to market capitalization tend to outperform stocks with a low ratio of book value to market capitalization Stocks with a low ratio of book value to market capitalization tend to outperform stocks with a high ratio of book value to market capitalization