Charles Schwab stock (NYSE: SCHW) has lost 39% YTD as compared to the 11% rise in the S&P500 index over the same period. Further, at its current price of $51 per share, it is trading 30% below its fair value of $73 – Trefis’ estimate for Charles Schwab’s valuation.
Interestingly, Charles Schwab stock had a Sharpe Ratio of 0.2 since early 2017, which is lower than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.21 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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