A comparative study of the average returns of value and growth stocks in TSE

One of the most important concerns among investors is finding a way for selecting the most appropriate stock or portfolio from within a couple of stocks traded in market place. Studies show a relationship between the stock return of companies and their book value on market value ratio (B/P). Low B/P stocks are considered as growth stock and high B/P ones are considered as value stock. This paper is about the comparison of average return of growth stocks with that of value stocks in a time horizon of since 1383 to first half of 1387 in Tehran Stock Exchange (TSE). Doing so, a sample of 50 listed companies were selected and sorted on the basis of B/P in 10 groups. The average return of the groups were compared. The results show that, in contrast with Fama & French findings, the average return of growth stocks is more than that of value stocks.