Two Reasons Stock Prices Go Upby Ronald Mushock
Stock prices go up for two primary reasons. The first is investors’ willingness to pay a higher multiple for a company’s earnings or cash flows. That’s what traditional value managers look for – undervalued securities that will be more richly rewarded in the future. We’re trying to find that as well, but we’re also looking for evidence of fundamental turnarounds and the additional stock price upside that comes from higher earnings expectations.