Total Score - System Factor Information
The final number. The broadest and highest level rating for a stock.
Description:
The total score aggregates the five major factors of the system to create the final score.
Total Score is calculated using:
- Financial Strength - An indicator of the company's overall financial position at this point in time. It is primarily a measure of fundamental risk.
- Price vs Earnings & Growth - The primary measure of value as determined by earnings and earnings growth rates over various time frames compared to price.
- Predictability of Earnings & Growth - Future growth rates are unknown. We use estimates from equity analysts but give consideration for how accurate they are likely to be.
- Quality of Earnings & Growth - All earnings are not equal, profits can be grown in a number of ways. This factor complements the PEG Factor by measuring its quality.
- Technical Strength - Price momentum, insider transactions and share supply are the determinants of technical strength.
- Cash & Cashflow - Measures cash on hand relative to company size and cashflow from operations relative to income from operations.
- Debt & Solvency - How solvent a company is and how able it is to manage and pay down its debt.
- Liquidity - Analyzes liquidity and turnover of assets versus probable liquidity requirements for a company.
- Earnings Yield - The basic measure of profitability - how much does the company make (before interest and taxes) versus how much the company is worth (Enterprise Value).
- Growth Rates - How fast the company is growing, measured over a number of timeframes.
- PEG Metrics - A modified PEG ratio designed to measure the earnings and growth of a company relative to the price. This metric overcomes some major shortcomings of the standard PEG ratio.
- Estimates Variability - How much consensus there is on future earnings and how stable the estimates have been over time.
- Historical Trends & Consistency - How stable earnings and business growth has been in the past.
- Earnings Surprises - An analysis of how accurate earnings estimates have been in the past and how well company management has controlled expectations.
- Organic Business Growth - Indicates how much of the company's profit growth is due to expanded operations and increased business versus reduced expenses versus earnings from accounting techniques.
- Internal Rate of Return - Measures how well a company can use its resources to generate profits, and how effectively it can compound its returns.
- Buybacks & Share Supply - This subfactor measures the trend in the supply of shares available in the market. The likely influeces are share buybacks and issuance plus exercise of internally issued options.
- Insider Movement - The trend in insider holdings.
- Price Momentum - Simple momentum, current market capitalization versus market cap. 1 year ago.