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Use the Piotroski F-Score to improve Growth Investment Returns

As a growth investor can you use the Piotroski F-Score to increase your returns?

That is what a friend of mine set out to test in an interesting research paper called Utility of Piotroski F-Score for Predicting Growth Stock Returns.

 

In the paper he looked at the following:

  • Can the Piotroski F-Score increase the returns of a growth investment strategy?
  • What are the structural differences between growth and value investing?
  • How large is the improvement in returns the use of the Piotroski F-Score can give growth investors.
  • The success of a long-short strategy that buys high F-Score and shorts low F-Score growth companies?
  • Practical ideas of how you can get the return benefit between high and low Piotroski F-Score growth companies.

 

Astounding results

The table below shows the results of the study:

BT_Pio_growth_2
 
Click to enlarge image

 

24.57% higher returns

As you can see there is a huge benefit to you as a growth investor of using the Piotroski F-Score.

Over the 12 year period High Piotroski F-Score companies (high quality companies) generated an average return of 10.74% whereas low Piotroski F-Score companies (low quality companies) generated a return of -13.82%.

The difference in the average return is an astounding 24.57%

 

Download Link

Here is the download link of the research paper: Utility of Piotroski F-Score for Predicting Growth Stock Returns.

BT_Pio_growth

 

Your Piotroski research analyst

 

 Tim_sign3

P.S.  Here is another interesting article on the Piotroski F-Score: Can the Piotroski F-Score also improve your investment strategy?