Revenue focused investments proven to outperform stock investments
Chicago, IL – Apr. 13, 2009 Entrex released market research today that compares public company revenue performance to stock price performance for the last 10 years. Analysis of the Dow Jones Industrial Average (DJIA) companies, along with a subset of OTC companies, both reflect how non-correlative (and usually negatively correlated) stock price is to the overall revenue gains of the enterprises over time.
This research proves how “revenue investing” would have significantly outperformed traditional “stock investing” over the same period.
Ten-year analysis (1998 to 2008) of the reported gross revenues of the DJIA showed that most companies’ revenue remained stable or increased, although stock prices have fallen in an non-correlative manner, confirming that stock value is neither a true gauge of a company’s financial position nor the best investment option for a economic return.
“The results over the 10-year period were astounding” said Stephen H. Watkins, CEO of Entrex. “Rarely was there ever correlation between revenue and stock price. Never has it been so quantifiable until this comparison was simplified across these DJIA and OTC or EMRI companies.”
The Entrex study showed that the two groups collectively grew revenue by over 50% during the 10 year span. Yet, stock price dropped approximately 20% over the same period. Obviously investments that were focused on the top line (or gross revenues) certainly would have outperformed long term investments in stock!
“You would expect a company’s revenue performance to equate roughly to stock price,” said Watkins, “but what we learned was that investor sentiment has a more far-reaching stock price correlation than the economic performance of the enterprise.”
“The studies conclude that revenue performance is a better marker of a company’s true overall financial position than stock price, and thus, an unexplored investment opportunity,” he added.
“This study empirically reveals that long term investors may be better served to avoid equities and look to revenue-based securities for investments—perhaps using a tool like Entrex’s TIGRcub™ security structure that was designed based on this research.”
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Entrex is the place to find, research, track, manage and trade securities for entrepreneurial companies. Through the TIGRcub™ security structure, Investors and Issuers are brought together in a Capital Market System that serves both private and public companies. TIGRcubs™ provide Investors with monthly income, liquidity and investment returns that are not based on exit events, or exposed to the volatility of the equity capital markets—all while providing Issuers a non-dilutive capital solution with risk-adjusted pricing simulating either debt or equity structures. Visit the Entrex website.
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