PT - JOURNAL ARTICLE AU - Mark K. Pyles AU - Weishen Wang TI - Seeking Alphas from Underperforming Stocks:<br/> <em>The Corporate Governance Perspective</em> AID - 10.3905/joi.2014.23.3.023 DP - 2014 Aug 31 TA - The Journal of Investing PG - 23--34 VI - 23 IP - 3 4099 - https://pm-research.com/content/23/3/23.short 4100 - https://pm-research.com/content/23/3/23.full AB - When a firm’s stock is underperforming, the likelihood of recovery and what drives the recovery should be of interest to both academics and practitioners. In this article, the authors find the number of options in top executives’ compensation to be positively associated with the chance of improvement, while firm earnings management has a negative influence. Utilizing these findings, the authors create portfolios that can achieve annualized abnormal returns in the range of 5% to 23%, significantly higher than those from a simple buying-loser trading strategy.TOPICS: Security analysis and valuation, options, performance measurement