Practical Applications of Abnormal Stock Returns Using Supply Chain Momentum and Operational Financials

Practical Applications Summary

A supply chain or supply network is a multicompany material-flow ecosystem, and operational data of customer companies can provide an indication of supplier companies’ future operations and business performance. In Abnormal Stock Returns Using Supply Chain Momentum and Operational Financials , published in the Winter 2017 issue of The Journal of Portfolio Management , authors Antti Paatela , Elias Noschis, and Ari-Pekka Hameri explain how an understanding of the interrelationships among supply chain partners’ businesses can provide an opportunity to gain abnormal investment returns in the stock market. Diverging from previous research, they focus on whole supply chains instead of single companies, on actual company financial data instead of more speculative stock market prices, and on the special dynamics of supplier–customer links.