In our last blog post we introduced the new Fair Value and Margin of Safety metrics that are now in Stock Rover. In this post we will be discussing our new scores metrics that offer our concise analysis of a stock in four key dimensions; Valuation, Growth, Quality and Sentiment.
The new score metrics are available in the Insight Panel Summary tab in its own separate sub-panel as shown below using Microsoft (MSFT) as an example.
The Scores panel shows each of the scores numerically, ranging from 0 (the worst) to 100 (the best). The scores are color coded so it is easy to see at a glance whether the score is great (dark green), good (light green), OK (yellow), bad (orange) or awful (red). The scores panel also shows the score for previous years so you can see how each score is changing over time. The screenshot below shows Microsoft’s (MSFT) Scores sub panel.
The purpose of the new scores analytics is to offer our concise analysis of a stock in powerful, but easy to digest format. Each of the composite score metrics are designed to use the best available accounting practices as well as source data from SEC filings.
The scores are computed for a company vs. the market as a whole. You can find the new metrics in Stock Rover’s the Metric browser in the Grades and Scores folder as shown below.
In addition to the four new score metrics, we have also created eight more derivative metrics from the scores, which is the decile rank of the company vs. its industry and vs. its sector across value, growth, quality and sentiment. These metrics can be found Sector and Industry deciles folder within the Stock Rover Metrics browser.
So what exactly do the scores mean? Let’s look at each score in turn.
Our value score looks at EV / EBITDA, P/E, EPS Predictability, Price / Tangible Book, and Price / Sales. The Price / Tangible Book and Price / Sales values are compared within a sector whereas the other metrics are compared across all stocks with adequate data.
Our growth score looks at the 5 year history of growth in revenue and net income as well as the forward estimates for EBITDA, Sales, and EPS growth to rank the best companies across all stocks with adequate data.
Our quality score compares profitability and balance sheet metrics to find high quality companies. Our computation includes ROIC, Net Margin, Gross Margin, Interest Coverage, and Debt / Equity ratio values.
Our sentiment score finds stocks that the market favors by comparing Short Interest Ratios, returns over several periods within the last year, Price vs. 52-wk High, Days Since 52-wk High and MACD signals.
The famous Piotroski F score determines the financial strength of a company based on 9 criteria. Companies with a score of 8 or 9 are considered strong and a score between 0 and 2 indicates a weak company.
The Altman Z-Score is a popular credit-strength measure aims to show how likely a company is to go bankrupt. Risky companies have a score below 1.8 and solid companies have a score of 3.0 or higher. Financial institutions like banks are not scored.
Please note that the new score metrics are available in our Premium Plus plan only
The new score metrics can be added to any of your existing views for inclusion in the table. I have created a new table view called “Scores” which contains the key score metrics. A screenshot of this new view is shown below. The view is displaying the Dow 30 stocks as an example. I have added this view to the Stock Rover Library, which means you can easily import this view into your Stock Rover account.
Please note that Scores Screener is available in our Premium Plus plan only
I took this one step further and created a new Scores screener looking for stocks with Value, Growth, Quality and Sentiment scores in the top 20% along with a Piotroski score of at least 6 and an Altman Z-Score of at least 3.0. The screener screens from a population of the 4000+ companies on the US exchanges. Premium Plus subscribers can import this screener from the Stock Rover Library. The screener name is Scores. Once imported, you can modify the screener to suit your own tastes, for example changing the filtering criteria or including stocks from the Canadian exchanges.
Below is a screenshot of the Scores screener criteria.
The following is a screenshot showing the results of the Scores screener run ranked by highest overall scores.
The new Stock Rover scoring system is a powerful, yet concise way to analyze key attributes of a company’s performance over time all with the goal of helping you make more informed and productive investment decisions. We hope you dive in and check out Stock Rover scores, so you will know the score when it comes to your investments.
Awesome functionality – thanks so much!
This gets more and more valuable … daily it seems. Thank you so much Howard.
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