Purpose – This study investigates the relations between long-window stock returns and prior years' increases in DuPont identity components: profit margin and asset turnover. In particular, we examine the relative effectiveness of profit margin and asset turnover to predict years ahead stock...

It is well known that firms with low price to earnings ratios (value firms) earn higher stock returns in the long term than high price to earnings firms (growth firms). This study investigates how insider ownership affects this relation. We show that when insider ownership is high, returns...