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The 'Value' Strikes Back - Value Strategies' Performance Through COVID

Ryan Telford profile picture
Ryan Telford


  • It has been one year since the markets bottomed in March of 2020 due to COVID.
  • Markets have rebounded beyond most investors’ expectations, with growth and tech stealing much of the spotlight.
  • The “rotation into value” narrative has recently gained some traction, however we will see that value has been performing quite well throughout the COVID recovery, particularly small-cap value.
  • We look at performance of the following strategies over the last year:  Net-nets, Low EV/EBIT, the Magic Formula, and Crisis Value, among others.
  • I provide a screener and ranking system for some value strategies, in addition to some stocks from the Magic Formula strategy.

Simple clean performance line graph design for 2019, 2020 and 2021 with a red coronavirus cell close up and icons
Photo by matejmo/iStock via Getty Images

Incredibly, it’s been more than 1 year since COVID-19 started wreaking havoc on the world at large, and by extension the financial markets. While it has been a difficult year, we have also come a long way. The

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Ryan Telford profile picture
A reader summed up my approach by referring to me as the "intellectual avenging angel".I am an individual investor who is obsessed with finding opportunities for alpha. I invest exclusively in quantitative strategies, through the use of current and historical data, and by looking at a group of stocks rather than individual securities. Using data to inform investing decisions rather than the narrative of the day can provide a real edge.  I am very passionate about separating the truth from the noise, and uncovering true opportunities that others have missed.I research and develop all of my own alpha generating stock trading strategies using Portfolio123.I invite you to join me on my investing journey, where we will learn about all things quant in the never-ending quest for alpha!Click the “Follow” button above to receive notifications of my new articles!

Analyst’s Disclosure: I am/we are long ZM, APPF, MIK, FIVN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This article is for informational purposes only. I am an individual investor and writer, not an investment advisor. Readers should always engage in his or her own research and consider (as appropriate) consulting a fee-only certified financial planner, licensed discount broker/dealer, flat fee registered investment adviser, certified public accountant, or specialized attorney before making any investment, income tax, or estate planning decisions.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (7)

Darp Research profile picture
@Ryan Telford So Nov 2022 we seem to be in another crisis setup. Curious, what did best in last year or so? Any more thoughts here?
Ryan Telford profile picture
@Darp Research Depending on your definition of "crisis" - for the crisis value strategy, if you look at the high yield spread (proxy for "crisis"), we peaked at 6% in July, but nowhere near say the levels during COVID.
If you took a position in the crisis small cap value strategy in July and held until today, returns were very good July to mid August, but fizzled until today, overall return of 3%, but still beating SPY (0% for same period).

Low EV/EBIT (small caps) has been very volatile over the last 12 months, with wide swings. CAGR of -3% last 12 months, but much better compared to -18% for SPY.

Net-nets - all depends on how you approach. Just blindly holding the 30 cheapest price to NCAV stocks over the last year (including biotech) would have resulted in -18%. I toy with another version that uses a signal (total # of net-nets in the market compared to historical levels) to time the purchase. If you used that, you would have bought in March, had almost immediate drawdown, but then a run-up since May, over overall 1 year return of about 10% (compared to -18% SPY).
l2edzl3oy profile picture
How long does Value outperform Growth coming out of a crisis (based on historical data)?
Ryan Telford profile picture
@l2edzl3oy , of the crises studied in the US small cap value universe, these value stocks tend to do well up to 2 years after the crisis; there are many caveats here of course, based on speed of recovery, other factors etc. Seeing as the COVID recovery has been so swift compared to other crises, it's anyone's guess if small cap value will continue to perform for up to 2 years.
l2edzl3oy profile picture
@Ryan Telford Definitely something for me to think about. Thanks for the insightful research!
Ryan Telford profile picture
@l2edzl3oy my pleasure.
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