Management Changes: Bigger Boost For Stocks With Low P/B

It’s obvious that a management changes can have a big effect on a company’s performance, but figuring whether the change will be good or bad for investors isn’t always as clear. The question has become even more important as the rate of CEO or CFO changes at European companies has gone from 15% in 2010 to 21% last year, and it turns out that it’s pretty close to what you might have guessed: out-sized performance (good or bad) usually reverts to the mean, but it’s easier to turn a small company around than a large one. Good and bad performance…