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CFA Level 3
Equity Portfolio Management

Fundamental Strategies in Equity Portfolio Management

Hard Active Equity Investing Fundamental Strategies

Jane, a portfolio manager at an investment firm, is evaluating a potential investment in a tech company that is currently trading at a P/E ratio significantly below its historical average. She recalls a fundamental analysis strategy called the 'Mean Reversion' strategy, which suggests that prices and valuations have inherent tendencies to move towards their historical averages.

Given this context, Jane is considering strategies that leverage the fundamental measures of the company, including financial statement analysis, management quality assessment, and industry positioning. She believes that the company has solid growth potential driven by technological innovations that could enhance its profitability.

When determining whether to invest, Jane must choose from several fundamental strategies that could justify her investment rationale. Which of the following fundamental strategies would best support her decision based on the information she has gathered?

Hint

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