Thursday, January 30, 2014

DuPont: Seeking Alpha Through Beta

In this post, I plan on evaluating whether Du Pont (DD) is a good opportunity to create alpha [α], through beta [β]. When we look at the make-up or components of α, it is clear that the market return, and risk free rates are uncontrolled by investors. It is equally clear that investors cannot influence β. The question is therefore, what does influence β? There is more detail on β below in this post, but in my view the key factors that influence β are business mix, financial leverage, and leadership quality.

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