Unprofitable Firms Are Outperforming Other Growth Stocks

By Anonymous

Shares of companies in the Russell 1000 Growth index with zero earnings are outperforming index overall, a sign of market distortion

Shares of fast-growing companies are on a tear this year, but many of the strongest performers share a worrisome trait: They don’t have earnings.

Growth companies—those focused on reinvesting to expand—tend to do best in bull markets and are often found in the technology, consumer-discretionary and health-care sectors that are driving the U.S. stock market higher in 2018.