TY - JOUR T1 - Seeking Alphas from Underperforming Stocks:<br/> <em>The Corporate Governance Perspective</em> JF - The Journal of Investing SP - 23 LP - 34 DO - 10.3905/joi.2014.23.3.023 VL - 23 IS - 3 AU - Mark K. Pyles AU - Weishen Wang Y1 - 2014/08/31 UR - https://pm-research.com/content/23/3/23.abstract N2 - 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 ER -