Index/Sector
Index
An index is made up of a variety of stocks, most often representing several,
if not all industry groups, and weighted by market capitalization. Because
of this varied and balanced composition, indexes are used as market
performance barometers.
Sector
A sector is a specific sub-classification of an industry group. For example,
Medical Products and Medical-Drugs are sectors within the Health Care group.
Theoretical Price
This is the mean price value of the stocks that make up the aggregate,
weighted by stock market capitalization.
Earnings Rev Trend
This is probably the most significant element of the proposed model -
the revision of earnings estimated by analysts over the last seven weeks.
This is the dynamic aspect or "timing" of our approach. The symbol [ ]
implies that during the last seven weeks the analysts raised their estimates
of growth; the symbol [ ] obviously indicates lower revised estimates during
the last seven weeks.
Valuation Rating
Our Valuation Rating indicates if a stock is selling at a relative premium or bargain price, based on its growth potential.
To estimate a stock's value relative to its current price our Valuation Rating combines:
- stock price;
- current earnings;
- projected long-term earnings growth.
By combining these elements we can establish a rating for the analyzed company.
There are five ratings, ranging from strongly undervalued [ ] to strongly overvalued [ ]
theScreener.com Valuation Rating
(difference between projected value and current price)
When we analyze a company's projected long-term earnings growth, we place a certain emphasis on the G/PE ratio.
While the first two elements in our analysis are important, and fairly simple to understand (stock price and current earnings), the G/PE ratio merits further explanation.
Most analysts watch the PE (Price Earnings ratio) - the ratio of stock price divided by earnings per share. In general, this ratio is fairly linear: a low PE suggests an inexpensive/low-risk stock, while a high PE suggests an expensive/high-risk stock.
In our model, the concepts of expensive/inexpensive do not depend on the PE, but on the relation between the PE and growth. Multifactor analysis has showed that the estimated growth of earnings provides the best base for the evaluation of a stock. There is approximately a 60% correlation of estimated earnings growth to stock value.
Our G/PE measure quickly evaluates a company and detects firms that offer the greatest relative potential for the future and are therefore, the most undervalued. Correspondingly, our G/PE also detects firms that offer the least relative potential for the future and are thus, the most overvalued. Our G/PE measure conveniently compares two stocks at a glance. Our model examines analyst projections of long-term discounted earnings , to establish our G/PE indicator. Our growth projections are always based on an average of at least three estimates.
The moment an investor buys a stock, the stock's present situation becomes the past, and the success of the investment depends fully on the future. theScreener.com takes into consideration the current earnings situation for a company but focuses on the future in order to establish a true Valuation Rating.
Number of Stocks
This specifies how many stocks are included in an aggregate.
Marketcapitalization in Billion
Market capitalisation is calculated by multiplying a firm's share price by the number
of shares outstanding. In the sector/index aggregates it is the sum of the different stocks in an aggregate.
Tech Reverse
Technical Reversal Point is the price at which we project the momentum to reverse. When a stock's price crosses over its technical reversal point, it can be an early signal for a potential buy or sell.
theScreener.com Tech Reverse
MT Tech Trend
In order to offer a little more security in the selection of stocks, we have added a technical rating that we call a "Trend Follower".
This is by no means a tool for detecting reversals in tendencies, but is simply a measure of the persistence of a given tendency.
The column "MT Tech Trend" indicates the current tendency, positive [] or negative [], and the column "Tech Reverse" indicates to which price point this tendency is valid.
% stocks in Uptrend
Indicates the percentage of stocks in an aggregate that the market is
currently favoring.
Rel Perf
This figure measures the performance of a stock relative to its national
index. For example, a grade of 2 for a given stock would mean that this stock
did 2% better than its national index. On the contrary, a grade of -3 would
indicate a performance of 3% under the index. We have chosen not to show the
absolute performance, since the index remains the valid benchmark. For a
given stock, figures that show an absolute gain of 2% in a market that also
gained 2% do not represent any remarkable information. However, a stock that
consistently beats its national index is clearly one sought after by investors. A chronic under-performance, of course, would indicate serious problems.
In fact, we use Relative Performance compared to ERT (Earnings Revision Trend). A positive ERT for a stock that does not show a positive Relative Performance rating should force the investor to question the pertinence of this revision. In the other direction, a stock with a negative ERT that stills beats its index (Rel Perf > 0) means that something special is happening with this stock, since investors are still buying it.
In conclusion, the investor should not search only for stocks that beat
historical indexes. The real importance is the relation of ERT to Relative
Performance.
LT Growth
This is the estimated annual growth rate of future company earnings, normally projected over the next three to five years, and expressed as a percentage.
Our LT Growth measure is averaged over at least three different estimates obtained from banks, brokers, or analysts. This measure is critical in our forecasting the future position of a company, as it is the basis of future shareholder value.
A figure of 18 means that for the next three to five years, the growth in company earnings is evaluated at an average of 18% per year.
Caution: Be skeptical of high long-term growth projections that differ greatly from growth rates of associated national market indexes or business sectors. These can often result from very low earnings for the most recent few years, thereby making a firm's projected earnings growth appear very strong by comparison with the lean years.
LT P/E
This is the PE ratio calculated on the basis of estimates of
growth in long-term earnings (Long Term Growth).
This shows the relationship of projected future stock price to future
earnings.
G/PE Ratio
When we analyze a company's projected long-term earnings growth, we place a certain emphasis on the G/PE ratio.
While the first two elements in our analysis are important, and fairly simple to understand (stock price and current earnings),
the G/PE ratio merits further explanation.
Most analysts watch the PE (Price Earnings ratio) - the ratio of stock price divided by earnings per share.
In general, this ratio is fairly linear: a low PE suggests an inexpensive/low-risk stock,
while a high PE suggests an expensive/high-risk stock.
In our model, the concepts of expensive/inexpensive do not depend on the PE, but on the relation between the PE and growth.
Multifactor analysis has showed that the estimated growth of earnings provides the best base for the evaluation of a stock.
There is approximately a 60% correlation of estimated earnings growth to stock value.
Our G/PE measure quickly evaluates a company and detects firms that offer the greatest relative potential for the future and are therefore, the most undervalued.
Correspondingly, our G/PE also detects firms that offer the least relative potential for the future and are thus, the most overvalued.
Our G/PE measure conveniently compares two stocks at a glance. Our model examines analyst projections of long-term discounted earnings growth, to establish our G/PE indicator.
Our growth projections are always based on an average of at least three estimates.
The moment an investor buys a stock, the stock's present situation becomes the past, and the success of the investment depends fully on the future.
theScreener.com takes into consideration the current earnings situation for a company but focuses on the future in order to establish a true Valuation Rating.
7 wks EPS
This column concerns the value of these revised earnings. A figure of 2,8 implies that the analysts, during the 7 last weeks, revised and raised their estimates by 2.8%. On the contrary, a negative number means that the earning were revised at a lower estimate
More Info
This link leads to additional informations like stock quotes or charts.
Please note: for Amersterdam, Brussels and Helsinki stocks, we
do not show the quotes of the home market, we show the quotes of the respective
stock traded in Frankfurt. The quotes for Swiss stocks are
linked to our us-finance service, the quotes for Canada are linked to
our canadian finance service.
Also go to How it works at theScreener.com website.
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