Zhuocheng Zhang
ABSTRACT
Abstract: This research aims to study the applicability of the Fama-French five-factor model in the Meals Industry of the US stock market, and then analyzes and interprets the industry based on the background of the COVID-19 pandemic. This model considers five factors namely market, size, value, profitability and investment in explaining the cross-sectional variations. Due to the outbreak of COVID-19, the world economy experienced a huge impact. It is an important and hot topic to study the changes in the world economy before and after the pandemic. The research subject of this paper is the US stock market of the Meals Industry, and the data is selected from May 2019 to December 2020 regarding March 1st, 2020 as the flashpoint to perform multiple regression. The results have shown that the five-factor model fits well after the pandemic and the industry prefers stocks with small-cap, high book-to-market ratio, high profitability and aggressive investment style. These have implications for asset pricing, market efficiency and investment strategies in the Meals Industry of the US stock market.
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