Analysis of Meal Industry in U.S. Stock Market during COVID-19 Based on Fama-French Five-Factor Model

DOI

10.2991/aebmr.k.220307.305How to use a DOI?

Keywords

COVID-19; Meal Industry; U.S. Stock Market; Fama-French Five-Factor Model

Abstract

The outbreak of COVID-19 seriously affected the economic development of the whole world, especially the United States, which is the world’s largest economy. All sectors in the U.S. have been negatively affected by COVID-19 to a greater or lesser extent, but there are also many opportunities in such a turbulent economic context. This paper focuses on the stock market in the U.S. meals industry and examines the specific impact of COVID-19 on U.S. meals stocks. Data relating to the U.S. meals industry from Kenneth R. French’s database was used for the analysis. Two time periods before and after the outbreak of COVID-19 were chosen to estimate the relevant coefficient through multiple linear regression analysis. Finally, the Fama-French Five-Factor Model was introduced to explain specifically the coefficients and significance changes of each factor. By comparing data before and after the COVID-19 outbreak, this paper finds that the U.S. meals industry was not sensitive to market volatility, with a small increase in the coefficient after the COVID-19 (almost equal to one). In contrast, the more significant phenomenon after the COVID-19 outbreak was that the SMB, HML, and RMW in the U.S. meals industry all had a significantly deeper degree of an impact than before COVID-19 and were strongly correlated with yields. In addition to this, there was a strong negative correlation between the CMA and the rate of return. In conclusion, after the outbreak, the key indicators for investors to invest in the U.S meals stocks were growing small and medium-sized enterprises (SMEs), high book-to-market (B/M) ratios, strong cash flow and profitability, and companies with a more aggressive investment style.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Linfeng Li
AU  - Suwei Wu
PY  - 2022
DA  - 2022/03/26
TI  - Analysis of Meal Industry in U.S. Stock Market during COVID-19 Based on Fama-French Five-Factor Model
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 1856
EP  - 1860
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.305
DO  - 10.2991/aebmr.k.220307.305
ID  - Li2022
ER  -