Last Week The Focus Was On Liquid Balance SheetsMay 19, 2014
According to our Factor Scoring Model, net debt as percent of capital had the highest R-squared of any fundamental factor that we track. Long-term debt as a perecent of capital had the second highest correlation to the market as well at 0.61. This is contrast to the trend over the previous year where the focus seems to have been on EPS growth by a wide margin (R-square value of 0.95). Factor relationships by week and year for the MSCI World are below.