High EVA Companies Had Lowest Returns in 2009 – Expected to Reverse in 2010
Money managers ignored economic profitability and bought stocks that dropped the most in the credit crisis, leaving opportunities for value investors in 2010. Smart managers are buying this year’s laggards, betting companies with the highest EVA will be rewarded as the Federal Reserve prepares to raise interest rates and the government removes stimulus.
Joel Stern, CEO of Stern Stewart & Co., suggests on its web site that the purpose of Stern Stewart and the EVA value based management system is "to make important ideas in financial policy and strategy workable for boards, senior management, and to promote the training and development of all employees so they can acquire an understanding of what it means to create shareholder value. Nothing is more important in any firm
Where have all the EVA-ngelists gone? Less than 10% of US companies manage for value.
Very interesting that I asked a group of current and ex-EVA consultants whether Value-based Management was still relevant, or I think I said, "does anybody care about EVA and VBM anymore? The one answer I got was from a Stern Stewart leader in India. Yes it's really relevant, but it's difficult to describe and differentiate from a host of other management practices. But most relevant I think is that at least in India managing for value is alive and kicking if
WHAT`S NEXT FOR CHINESE ENTERPRISES? EVA, OF COURSE
In WHAT`S NEXT FOR CHINESE ENTERPRISES? Terry Qin, Vice President of Stern Stewart & Co. located in Beijing, writes that as many of China's largest enterprises gains influence in capital and traded goods markets, management (and the state, it is still ruled by the Communist Party after all) realizes that "they need a world-class, more complete measure of performance."
