When comparing the implied sales growth expectations (VE Sales Growth) of each sector to what each sector has historically delivered in sales growth in the past 5 years, the Technology sector looks to have the lowest expectations priced-in. After solving for the implied sales growth for every company within the S&P 500 the entire sector has an average -2% sales growth priced-in. Measuring the spread between a company’s or sector’s VE sales growth expectations to what they have historically delivered will give you a good idea of which company’s have the best chance of meeting or exceeding those expectations and thus be more likely to outperform.
VE Sales Growth – implied sales growth a company needs to generate to justify their current price.
.jpg)
