Traditional (aka ‘fundamental’) portfolio managers often ascribe to the notion that stock prices follow corporate profits, over the long run. Systematic managers, who analyze historical data to identify characteristics that are rewarded by markets, have also demonstrated that owning profitable companies has historically enhanced investment performance, over the long run. Using academic research data from the University of Dartmouth, we can verify these claims. The process is simple: calculate the profitability of all stocks in the universe, sort them based…