, as the pandemic rages on, but focusing on"high-quality factors" can help reveal long-term winners, Morgan Stanley said.
Only 8% of the small-cap Russell 2000 still provide guidance, down from 21% a year ago, the bank said in a note on Wednesday. But in its absence, a superior approach is to explore"quality factors" that reflect the underlying health of a company, Morgan Stanley said. Lerner and his team found that an effective way to"find alpha in earnings surprises" is to go long high-quality stocks that have beat consensus earnings and revenue estimates, and short low-quality stocks that missed expectations.
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