July 29, 2015

Using dynamic metric averages over a period of time as a baseline

I thought I would share something a seasoned analyst taught me. It’s a simple concept, but it was not overtly obvious, to me at least, when I first encountered it. It’s the third option below. I go through the first two options for reference.

When screening equities, using metrics (or ratios), you’ve got three main options (or some combination of the three options below):

1).