Recognizing Intangible Assets -A Study About Employee Satisfaction and Stock Returns

Abstract

Valuating intangible assets is an art and making sure that they are correctly valued is crucial for the valuation process for any investor. This is of increasing importance, because companies today have a large part of their value attributed to intangible assets. This thesis will examine this difficulty and more specifically the intangible asset, employee satisfaction. The portfolio created and analysed in this thesis consists of companies on a list created by the institution A Great Place to Work. Companies on this list have high levels of employee satisfaction. This research shows that investors choosing to invest in a portfolio of companies where the employees show high levels of employee satisfaction earn significantly higher returns in the long run than predicted by the Capital Asset Pricing Model and the Market Model.