Japan stocks
We backtested sector-relative EV/EBITDA on 19 years of Japanese stocks (JPX, 2006-2025). 2.73% CAGR vs 2.95% Nikkei 225, an excess of -0.22%. Over the invested years alone it trails by 1.11 points a year. Even Abenomics in 2013 lifted the index faster than the discount names.
Hong Kong stocks
We backtested sector-relative EV/EBITDA on 22 years of Hong Kong stocks (HKSE). 3.08% CAGR vs 0.49% Hang Seng, +2.59% excess. Strip out the three cash years that dodged a 46% index fall and the edge drops to +0.09% a year. Sharpe 0.003, max drawdown -57.04%.
China stocks
We backtested sector-relative EV/EBITDA on 25 years of China A-share data (SHZ+SHH). 4.11% CAGR vs 3.54% SSE Composite, +0.57% excess. But Sharpe 0.039 and a -64.72% max drawdown tell the real story: the signal barely beats a market that barely returns anything. Discounts follow policy, not value.
Canada stocks
We backtested sector-relative EV/EBITDA on 24 years of Canadian stocks (TSX). 7.83% CAGR vs 4.44% TSX Composite (+3.40% excess), but max drawdown -47.36% and down capture of 104%. Every point of the excess comes from up capture, not from downside protection.
Germany stocks
We backtested sector-relative EV/EBITDA on 25 years of German stocks (XETRA). 8.29% CAGR vs 4.45% DAX (total return), +3.85% excess, zero cash periods, 72% win rate. Big caveat: on a German-domiciled universe the excess falls to +0.37%, so the edge belongs to XETRA listings.
Switzerland stocks
We backtested sector-relative EV/EBITDA on 23 years of Swiss data (SIX). 8.96% CAGR vs 1.90% SMI (price return), 17.41% down capture, MaxDD -29.0%, Sharpe 0.359. Two caveats: the SMI excludes dividends, and on a Swiss-domiciled universe the +7.07% excess becomes -0.86%.
UK stocks
We backtested a sector-relative EV/EBITDA screen on 25 years of UK stock data (LSE). 9.49% CAGR vs 0.86% for the FTSE 100 (price return), zero cash periods, and a max drawdown of -36.97%. The FTSE 100 is price-only, so true excess vs a total-return FTSE is closer to +5% annually.
global stocks
We ran sector-relative EV/EBITDA on 15 global exchange sets (2000-2025) against each market's own local benchmark. 10 of the 13 with a usable record show positive excess. India, Japan and Thailand underperform. UK leads at +8.63%, US is the cleanest at +3.24%.
India stocks
We backtested a sector-relative EV/EBITDA screen on NSE stocks (2006-2025). 10.20% CAGR beats the S&P 500 by 2.56 points, but the Sensex returned 11.4%. Against the local benchmark, the strategy trails by 1.20% per year. Full data, SQL screen, and honest assessment.
EV/EBITDA
We tested a sector-relative EV/EBITDA screen on 25 years of US stock data. When a profitable company's EV/EBITDA falls 30%+ below its sector peers, it tends to mean-revert. 10.88% CAGR vs 7.64% for the S&P 500, with 73.0% down capture and zero cash periods across 25 years.