Quality & Innovation#396tier 2experimental liveNew

`sga operating leverage`

cadence: Quarterlydata: lowshort only

2003

Anderson, M., Banker, R., Janakiraman, S. (2003). "Are Selling, General, and Administrative Costs 'Sticky'?" Review of Accounting Studies 8(2), 47-63. Extensions: Banker-Chen 2006, Weiss 2010.

Read the paper →

What it checks

Companies whose overhead costs (SG&A) are growing faster than revenue are sitting on a hidden problem: when revenue softens, those costs don't drop as fast, so earnings get squeezed. Short the stock when this gap widens beyond 5-10 percentage points.

Mechanism

SG&A is sticky: when revenue falls, SG&A falls less-than-proportionally. Firms where SG&A growth has outpaced revenue growth carry a hidden operating-leverage liability that compresses earnings on the next revenue softening (operating de-leveraging effect).

No production champion data for this family yet. Stats appear once the discovery pipeline promotes at least one strategy with this family tag, or once a multi-family blend that includes it earns a champion slot.

Signal rule

(SG&A_YoY - revenue_YoY) >= +5pp or +10pp on available_date fires SHORT 60/90/180d.

Data dependencies

daily_prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
key_metrics
Worker data table, see services/worker schema.

Expected edge

Paper alpha: -3 to -6% over 6-12mo
Paper window: T+1 to T+180d post-disclosure

Anderson-Banker-Janakiraman 2003; -3 to -6% over 6-12mo on top-decile gap.

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sga operating leverage