Clayman (1987)

Clayman, Michelle. "In Search of Excellence: The Investor's Viewpoint." Financial Analysts Journal, May/June 1987.

The metrics used here to select "excellent" companies are: asset growth, equity growth, high price/book ratio, return on capital, return on equity, and return on sales. The author reviews 29 such companies and finds that 16 underperformed the S&P 500 during 1981-1985. But, a portfolio of these stocks would have outperformed, with an alpha of 0.16% per month. The financial ratios of both "excellent" and "unexcellent" companies are found to regress toward the mean.