Decision summary
Question: Valuation vs Future Returns
Forward PE <15 produced a 27.5% median 24-month return versus 25.2% for all eligible observations. The loss greater than 20% rate was 11.2% versus 13.7% baseline.
- Future return potential: Forward PE <15 median 27.5% versus All eligible observations 25.2%; excess 2.3%.
- Correction/drawdown risk: loss greater than 20% 11.2% versus baseline 13.7%; excess -2.5%. Median max drawdown -9.3%.
- Entry timing risk: entry condition Favorable based on loss risk and forward drawdown.
- Use: buying/holding/trimming decisions require entry condition, thesis condition, and current position. No simple Buy/Sell label is inferred from price history alone.
Baseline comparison
| Group | Median return | 25th pct | 75th pct | 10th pct downside | Finished positive | Loss >20% | Loss >30% | Loss >50% | Median max drawdown | Sample size |
|---|---|---|---|---|---|---|---|---|---|---|
| Forward PE <15 | 27.5% | 2.5% | 55.7% | -22.9% | 77.0% | 11.2% | 7.0% | 2.1% | -9.3% | 2,424 |
| All eligible observations | 25.2% | -2.0% | 55.1% | -27.5% | 73.5% | 13.7% | 9.0% | 3.4% | -10.4% | 4,650 |
| EW broad index | 28.3% | 13.9% | 51.5% | -0.9% | 85.9% | 3.6% | 3.1% | 0.0% | -9.6% | 4,641 |
| Signal excess vs baseline | 2.3% | -2.5% | -2.0% | -1.3% | 1.1% |
Distribution by bucket
| Group | Median return | 25th pct | 75th pct | 10th pct downside | Finished positive | Loss >20% | Loss >30% | Loss >50% | Median max drawdown | Sample size |
|---|---|---|---|---|---|---|---|---|---|---|
| Forward PE <15 | 23.6% | -4.8% | 56.2% | -30.9% | 71.3% | 15.3% | 10.4% | 4.0% | -11.5% | 32,761 |
| 15-25 | 28.6% | 4.8% | 53.4% | -15.5% | 79.4% | 7.8% | 4.5% | 1.3% | -7.1% | 9,830 |
| 25-40 | 28.5% | 3.7% | 57.0% | -18.8% | 77.9% | 9.3% | 5.2% | 1.3% | -7.2% | 5,291 |
| 40+ | 28.3% | -1.2% | 62.9% | -25.8% | 73.8% | 12.6% | 8.5% | 2.9% | -9.2% | 5,393 |
Current ticker mapping
| Ticker | Current signal | Historical median return | Loss >20% | Entry condition | Suggested action |
|---|---|---|---|---|---|
| ADBE | Forward PE 10.4 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| ADP | Forward PE 19.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AEE | Forward PE 17.3 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AEP | Forward PE 22.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| ALL | Forward PE 1.7 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AMGN | Forward PE 19.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AMT | Forward PE 17.8 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AMZN | Forward PE 20.4 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| ANF | Forward PE 8.8 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AON | Forward PE 11.5 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AOS | Forward PE 15.7 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| APA | Forward PE 5.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AXP | Forward PE 19.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| AZO | Forward PE 22.9 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| BAC | Forward PE 11.9 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| BBWI | Forward PE 8.5 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| BBY | Forward PE 13.1 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| BEN | Forward PE 13.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| BKNG | Forward PE 1.2 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| BMY | Forward PE 12.1 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| BX | Forward PE 25.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| C | Forward PE 13.8 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CB | Forward PE 8.8 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CCL | Forward PE 8.7 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CEG | Forward PE 18.9 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CF | Forward PE 6.5 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CHTR | Forward PE 3.5 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CI | Forward PE 9.1 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CMCSA | Forward PE 3.6 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| COP | Forward PE 24.1 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CPB | Forward PE 11.6 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| CRM | Forward PE 16.5 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| D | Forward PE 16.2 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| DAL | Forward PE 11.1 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| DG | Forward PE 13.0 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| DHI | Forward PE 19.3 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| DIS | Forward PE 12.4 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| DPZ | Forward PE 17.2 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| DRI | Forward PE 21.3 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
| DUK | Forward PE 18.2 | 27.5% | 11.2% | Acceptable with staged entry | Use valuation as support, not standalone thesis |
Suggested actions
| Situation | Suggested action |
|---|---|
| No position | Starter or staged entry is supported if thesis condition is Intact and valuation/liquidity filters pass. |
| Partial position | Hold and add in stages while thesis remains Intact. |
| Full position | Hold; new adds require portfolio room. |
| Overweight position | Do not add solely because the base rate is favorable. |
| Thesis deteriorating | Reduce or avoid regardless of historical base rate. |
What this signal does not mean
This signal does not create a simple Buy/Sell label. It is a historical base-rate input for entry sizing, holding discipline, and thesis monitoring.
Dataset disclosure
Universe: local database stocks with adjusted monthly prices from 2001-01-31 to 2026-06-26. Historical S&P 500 snapshot membership exists, but the studies use the available local stock universe rather than fully reconstructed historical constituents. Filters: adjusted price at least $5, trailing 3-month average daily dollar volume at least $1 million, market cap at least $300 million when available. Survivorship-bias risk remains.
Methodology
Observations use monthly adjusted prices when available, 24-month forward returns, forward maximum drawdown from the observation price, and a 12-month cooldown to reduce overlapping signals. Baseline uses all eligible observations that pass the same price/data availability filters. EW broad-market index is used because SPY price history is not available in the local service.
Historical patterns do not guarantee future results.