Abstract:

The aim of this study is to measure performance of price-earnings and book-to- market ratio which are stock valuation methods on stock investment decision. The study includes 5 years period between 2008 and 2012. It has been used data set composed of 136 firms and 680 observation in Borsa Istanbul Manufacturing Industry by the years. According to results of analysis, book-to-market method is more successful than price-earnings ratio method on the investment decisions. Besides, while there isn’t significant difference among stock returns as statistical it is reached result that returns of stocks having high and low book-to-market ratio are different from each other.

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