Your value-oriented investment management company recently hired a new analyst, Bob Westard, because of his expertise in the life sciences and biotechnology areas. At the company’s weekly meeting, during which each analyst proposes a stock idea for inclusion on the company’s approved list, Westard recommends Human Cloning International (HCI). He bases his recommendation to the Investment Committee on two considerations. First, HCI has pending patent applications but a P/E that he judges to be low given the potential earnings from the patented products. Second, HCI has had high relative strength versus the S&P 500 over the past month. A. Explain the difference between price multiples and relative strength approaches. B. State which, if any, of the bases for Westard’s recommendation is consistent with the investment orientation of your company.