The return of value?

The return of value?

In keeping with the general gloom that surfaced around the middle of last month, a report from EY revealed the number of profit warnings issued by UK companies has reached the highest level since summer 2008.

A glance at recent newsflow shows just how significant these have been: from a downgraded forecast by Standard Chartered last week to the huge accounting error made by Tesco last month. Firms have been punished heavily by the market as a result. The more optimistic would say a certain category of fund managers – value investors – are now rubbing their hands in anticipation. The total number of profit warnings in Q3 this year has reached 69, quite a significant jump from 54 in the same quarter last year. However, from an equity market point of view, value has not outperformed growth...