New Blood New Direction
Investors are always looking for bargains in the stock market, and at the same time, are naturally intrigued when shares of household names are hammered. This combination has resulted in investors making big returns in certain beaten down names over the years. It’s also spawned investment theories like the Dogs of the Dow.
But there is one approach to this that has begun to stand out, and it’s focusing on broken household name companies that have brought on new CEOs.
And, there is academic evidence this is not a coincidence.
In September, the University of Missouri released a study of 97 companies where the CEOs were forced out over strategic disagreement with the board. Since then, whose share price and operations have outperformed. New CEO’s from within the company also outperformed those that brought in an outsider.
Right now, this theory is working big for several well-known companies with new management in the past year.
So, the question is whether this is a viable investing approach and what stocks will see the biggest rebound in their share price?
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