Knowledge center · Factor library
Asset Growth
Year-over-year growth in total assets — rapid growth has historically preceded weaker returns.
Formula
Year-over-year change in total assets, centered on a moderate-growth reference and sign-flipped (high growth reads bearish)
Interpretation
Companies that grow their asset base very rapidly — often through aggressive acquisitions or capital spending — have on average underperformed more disciplined peers, an overinvestment effect.
What good looks like
Moderate, disciplined asset growth.
What bad looks like
Very rapid asset growth.
Typical range
Centered around a moderate positive growth rate, not zero — some growth is normal and expected.
Limitations
Does not distinguish good growth (funding genuinely high-return projects) from empire-building; one year of high growth off a low base can look identical to a mature company overexpanding.
How OmniSignal uses it
One of the most robust anomalies in the investment/quality factor literature.
Where it enters the score
Quality family
References
Cooper, Gulen & Schill (2008), "Asset Growth and the Cross-Section of Stock Returns"
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