S&P Dow Jones Indices Revises U.S. Growth and Value Rules Dec. 21

S&P Dow Jones Indices will revise its U.S. style-index methodology Dec. 21, changing how benchmarks classify growth and value stocks across several major U.S. equity index families. The growth framework will remove 12-month share-price momentum from its scoring factors. It will keep the three-year sales per share growth rate, leaving that measure in place as the methodology changes how growth classifications are determined. For value scoring, the revised rules replace book value-to-price with intangibles-adjusted book value-to-price and use a simple average of trailing and forward one-year earnings-to-price measures. They also add free cash flow-to-price. Sales-to-price remains a value factor, so the update changes some of the inputs while retaining that existing measure. The free cash flow-to-price factor will not apply to every sector.

BeCrypto News shows a short excerpt and links to the publisher. The full report belongs to TokenPost.