Investment factor
InvestingDefinition
Tilt toward companies with low investment / capex growth. Empirical anomaly: companies that invest aggressively tend to underperform companies that don't. Aaron, Hahn, Cohen, Kogan paper (2008).
Mechanism: managers over-invest at the top, paying away profitability. Conservative-investment firms protect capital better. Part of Fama-French 5-factor model.
Mechanism: managers over-invest at the top, paying away profitability. Conservative-investment firms protect capital better. Part of Fama-French 5-factor model.