WORKING PAPER · VERSION 1.1
Do Durable Market Power Characteristics Predict Future Fundamentals and Stock Returns?
A preregistered public-data study of U.S. equities, 2017–2025
Published by Monopoly MOAT at mplymoat.com. Monopoly MOAT is an independent research publication owned and operated by Hesham Mashhour; it is the publication venue, not the author's institutional affiliation.
Working paper, version 1.1. This manuscript has not been peer reviewed. · Preregistered analysis · Published 28 August 2026 · 25 pages · 5 figures · 13 tables
ABSTRACT
What the study tested—and what it found.
This study asks whether public, point-in-time characteristics associated with pricing power, operating durability, and public-company sales dominance predict future operating performance and stock returns. I construct a preregistered Durable Market Power Score (DMPS) from five SEC filing-based inputs and public-company sales share, then test it in a historically reconstructed U.S. equity universe. The formation universe contains 7,152 issuer-years from June 2017 through June 2025; after sector exclusions, 2,573 of 6,137 issuer-years have every score input. Complete observations represent 64.26% of eligible capitalization, a material selection limitation disclosed before outcomes were analyzed.
DMPS does not validate as a predictor of the two registered one-year-ahead operating outcomes. Its coefficient is −0.0150 for next-year gross margin (Holm-adjusted p = 0.910) and 0.0105 for next-year operating profitability (Holm-adjusted p = 0.881); wild year-cluster bootstrap tests reach the same conclusion. The value-weighted high-minus-low portfolio has a positive monthly six-factor alpha of 0.855%, or 10.26% annualized, but its 95% confidence interval is −2.77% to 23.29% and p = 0.121. The registered secondary Fama–MacBeth estimate is also positive—0.665% per month, or 7.98% annualized—but imprecise (p = 0.180). Joint Holm adjustment for the two return tests gives p = 0.243.
The results therefore do not support describing DMPS as a validated durable operating-performance construct, and they do not establish abnormal returns at the preregistered 5% level. They do leave an economically large but weakly identified positive return association for future study. The design is predictive and noncausal; public sales share is not a product-market definition or a direct markup measure.
REGISTERED FINDINGS
The point estimates are not the conclusion.
Neither registered one-year-ahead operating outcome has a statistically detectable DMPS coefficient after the prespecified adjustment.
The estimate is positive, but its 95% confidence interval spans −2.77% to 23.29%; p = 0.121.
The registered secondary estimate is positive but imprecise; p = 0.180.
Complete score observations cover 64.26% of eligible capitalization, so selection remains a material limitation.
RESEARCH DESIGN
Point-in-time inputs, frozen decisions, visible failures.
Universe and score
Nine June formations from 2017 through 2025 produce 7,152 issuer-years. The score uses gross-margin level and stability, operating-profitability level and stability, and public-company sales share within broad FF12 industries.
Evidence
SEC filings and historical 13F security lists supply point-in-time accounting and universe evidence. Fama–French factors supply the registered return controls. Licensed Marketstack payloads support the price layer but are not redistributed.
Registration
Version 1 stopped at its outcome-blind coverage gate. The approved version-2 addendum changed only the treatment of that shortfall before any DMPS value, return, future outcome, or predictive coefficient was inspected.
Interpretation
The design is predictive, not causal. Public sales share is a public-company denominator—not a legally or economically defined product market, a markup measure, or evidence that a company is an unlawful monopoly.
PAPER AND MATERIALS
One canonical page; the registration stays authoritative.
Licensed raw Marketstack payloads and credentials are not published. The manuscript package preserves derived tables, figures, completion hashes, source lineage, and the boundary between registered and post-registration analyses.
CITATION
Cite the canonical research page.
Mashhour, H. (2026). Do Durable Market Power Characteristics Predict Future Fundamentals and Stock Returns? Monopoly MOAT. https://mplymoat.com/research/durable-market-power-stock-returns/
BibTeX
@misc{mashhour2026durable,
author = {Hesham Mashhour},
title = {Do Durable Market Power Characteristics Predict Future Fundamentals and Stock Returns?},
year = {2026},
publisher = {Monopoly MOAT},
howpublished = {Working paper, version 1.1},
url = {https://mplymoat.com/research/durable-market-power-stock-returns/}
}DECLARATIONS
Ownership and conflicts are explicit.
Affiliation: Independent Researcher.
Publisher: Monopoly MOAT (mplymoat.com) is an independent research publication owned and operated by the author. It is the publication venue, not an institutional affiliation or separate research sponsor.
Funding: This research was self-funded by the author and received no external funding.
Competing interests: The author holds diversified investment funds that may include securities represented in the study universe. No issuer, fund sponsor, or index provider funded, commissioned, approved, reviewed, or influenced this research.
Research disclaimer: This paper is provided for research and informational purposes and is not investment advice. The design is predictive and noncausal. The reported return estimates are statistically inconclusive and do not establish an investable anomaly.