A value or a growth strategy? Empirical evidence from a panel of Greek listed firms

This paper aims at verifying the presence of value versus growth hypothesis and identifying the variables that best explain their impact on Greek stock profits. This is implemented by categorizing stocks into value and growth stocks as well as by using the fundamental analysis approach with panel data, in order to find stocks that will outperform the market. To this end, we investigate the role of determinants as book-to market, priceearnings and price-to-cash flow variables. All of them are considered to indicate a value stock if the ratio is low. By contrast, if the ratio is high, then the stock is considered to be a growth stock instead. The sample is made up of firms with shares listed on the Athens stock market spanning the period 2000 -2013. The results indicate the presence of an association between the variables used and the value and growth strategies. Growth stocks present higher profits than value stocks. Furthermore, in firms with investment strategies and greater profits, the empirical findings document that the variable that identifies growth stocks is the book-to market ratio.