How to measure the attractiveness of value?

Back in December, I opined that small-cap growth looked attractive. I based my opinion on the PEs of the holdings of small-cap growth cap funds against the market averages. The statistic was just a replication of the method described in Peter Lynch’s book “Beating the Street”. I am looking to produce a similar statistic for value companies, but I don’t know what to measure, or what constitutes “good” or “bad” value. So I am appealing to readers to offer suggestions as to how such a goal might be accomplished. I done have access to any expensive databases, so if the method is too complicated, I might not be able to apply it.

As an aside … you might be interested to know how small cap growth has done YTD. The ASX (All-Share) is up 7.4% YTD, whilst the top 5 holdings of MFM Slater Growth, a small-cap growth fund, are up by a mean of 10.1%. It’s ahead, for sure, although I couldn’t rule out a statistical fluke.


About mcturra2000

Computer programmer living in Scotland.
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