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Low price-earning ratios haven't helped companies' share prices

Growth investors have been winning the battle over value investors for some time, but a new report from Bank of America-Merrill Lynch shows that evaluating a company's price-earnings ratio may be losing its value altogether.

The big picture: "Low P/E remains the most popular factor for the 14th year running despite its weak performance for most of this bull market (the factor lagged by 46ppt since 2010)," Bank of America Merrill Lynch's equity and quantitative strategist Savita Subramanian said in a note to clients.

  • As CNBC notes: "Nearly 80% of investors surveyed by the bank use forward price-to-earnings ratio as a factor when investing, making it the No. 1 factor annually, according to the study. Paradoxically, low P/E stocks have underperformed the market since 2010, the study shows."

Go deeper: Credit Suisse double revises its S&P target