Are Complex Value Screens Worth The Trouble?

The basic premise behind value investing is easy enough to understand: by stocks for less than they’re worth and then sell them after they appreciate. But even if you have the patience to put such a strategy into place, knowing what companies are actually worth in the first place is no small task. A host of value-oriented screens and strategies have cropped over the years to make investors’ lives easier, but according to research from Alpha Architect, complexity doesn’t lead to better results.

“We compare the performance of 13 value investing screens used by practitioners against a simple model based on buying stocks with the lowest enterprise multiple. Our sample of value investing screens underperform the simple lowest...