The impact of industry effects towards the relationship between net operating assets and future stock returns

I study the impact of industry upon the relationship between Net Operating Assets (NOA) and future stock returns as previous literature often argued that NOA tends to have a negative relationship with a firm's future performance and its stock price. I argue that NOA’s components coming from industry and firm are both responsible for investor’s misperception over the implication of NOA and future stock returns, which they tend to overvalue stocks with high NOA while undervalue stocks with low NOA. From 445 Thai listed firms from 2014-2019, the result suggests that industry-common NOA has a negative relationship with future stock price while firm-specific NOA has a positive relationship with future stock returns.