A shift in equity management would define the style of a company in terms of its fundamental ability to create wealth. From an economic value added perspective, a growth company invests for rapid economic profit change, while a value company looks to create wealth through downsizing or restructuring a low-to-negative economic profit spread business. In either case—EVA growth or value—these company types (among profiles between the extremes) represent good stocks when actual expectations of economic profit growth exceed expectations already imbedded in share price. This economic profit style of investing emphasizes the fundamentals of wealth creation and reconciliation of share price with the level realistically achievable.
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