November 20, 2017

Investment Green Flags – High Cash Flow Score

Now, this flag looks incredibly simple, but whenever you see orange text in Equities Lab, it means that there is a deeper formula to explore. Clicking on that formula we are presented with the following –

Though the flag itself is simple, the underlying formula is not. Understanding and analyzing cash flow statements takes time. Thankfully, we can do it easily here by importing the Cash Flow Score – a number from 0 to 10 based on the above metrics. For each line that is true for a company, it will score 1 point. The lines look for the following –

  • A company must be ranked in the bottom 35% of all companies within their sector for (total debt 1Q/free cash flow t12m) and free cash flow MUST be a positive number.
August 5, 2017

Can’t Compare Split Adjusted Prices

If you have been using the Equities Lab system in recent weeks, you may have seen a new error that hadn’t appeared before.

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Stock Server Error:Server Error:Cannot compare split ajusted quantities to constants: greater(Close, 444)

Don’t worry! This error message doesn’t mean that the system is down; it simply tells you that there is a split adjusted value in a place it shouldn’t be.

Have you ever input the following line into a screener?

If you have, you’ll need to change that to the following –

What’s the difference?

  • Close
    • This is the split-adjusted value. When a company undergoes a stock split the value of stock changes, typically by half, and the number of available shares doubles.
July 25, 2017

Ohlson O-Score

If you’re a short seller, then I’d like to introduce you to the Ohlson O-Score. This is a score created by Dr. James Ohlson of New York University, aimed at predicting the financial distress of a company. The Ohlson O-Score is the result of a nine-factor linear combination of coefficient-weighted accounting ratios that are found from financial disclosure statements that are provided by publicly traded companies. Below is the actual formula for the Ohlson O- Score.






Ohlson O-score formula

Ohlson O-score formula

So, from a first glance it looks very complex, well that’s because it is. For the purpose of understanding what exactly this equation is composed of, let’s break it down piece by piece.…

July 12, 2017

Industry Rotation – Something you might stay away from

I’ve been seeing a lot of articles recently that are very focused on the idea, that by purchasing the industry or sector that performed best over the past year you are giving you the best chance at making returns. I’m a little skeptical, but just as hopeful to see whether or not this is a potential new avenue to take in my portfolio.

Here is the base screen for what we want to do. This screener takes each sector and finds the total average change of close over the past year – making sure they have a market cap of at least $1 billion.…

July 8, 2017

Stocks That Have Always Gone Down

   When investing, for every fairy tale stock like an Amazon(AMZN) or Nvidia(NVDA), there’s an equally disastrous stock like MoSys(MOSY) or Gevo (GEVO). To avoid getting into stocks like these, it’s important to look at their failures and analyze them to avoid getting into the next potential train wreck of a stock.  Let’s screen for some stocks that have always gone down.




   For this screener we used the equation [always ((change of close over 252 days) < 0 ) within 752 days)] To simplify that equation, it basically means “screen for stocks that have consistently declined every year for 3 years. Only 7 results were shown, so let’s take a look at a couple of these companies’ history and see where it all went wrong for them.…

June 30, 2017

Creating Your Own Score

Most anytime we analyze a company or build a screen; we use any number of scores that are pre-built in the Equities Lab system. These scores are tried and tested, but they lack that personal touch. I think it’s time we learned how to build our own scores within the software.

To begin creating your score, you need to open up your explorer and click “Formula” under the Create New area. Go ahead and name your formula anything you like, but you’ll want it to be something regular that you can remember.

At its core, a score is a collection of True/False variables.…

June 17, 2017

Monte Carlo Simulation – Advanced Investing

Monte Carlo Simulation

As investors, we all know that each investment we make comes with a certain amount of risk. We can decrease this risk by understanding all possible outcomes. Better yet, we can visualize each outcome through the use of a Monte Carlo Simulation. In a broad stroke definition – a Monte Carlo simulation allows for people to make informed quantitative decisions based on a range of possible outcomes.

What does this mean?

First, we build a model we want to test. In the case below, that model would be the Screener of which we want to plug in different values for the Value Score.…

June 9, 2017

Benjamin Graham Score

In my years of using Equities Lab as a quantitative investment tool, I have never lost sight of the core values of long term investing. Many of these values are in the teachings of Benjamin Graham and used by an idol of mine, Warren Buffett. Remembering this, no matter how much risk I take on in my portfolio, I always keep a subsection for value investments. Now, his teachings are comprehensive, and there are more value factors than any one person wants to write in each of their strategies; and because of this we have created our own Graham Score which looks for ten different factors based entirely on the teachings of Benjamin Graham.…

June 1, 2017

Low debt vs. High debt

  Debt, a word that consumers and college students know all too well. How do companies view debt and how does it affect their stock price? Let’s find out by taking a look at both high debt companies and low debt companies.We’ll start off with high debt. This Equities Lab stock screener finds companies with a debt to equity ratio ranking them in the top 25% of the market, and total liabilities to assets ranking in the top 25% of the market while outperforming by 2%.

  High debt companies have more pressure under them to perform well in order to please their shareholders, while also avoiding drowning in their own debt.…

May 22, 2017

Simulating a Short Strategy

Shorting in Equities Lab

Before, if you wanted to test out a short strategy, you’d have to run your screen and hope that it loses money. That’s now changed thanks to our new “position_weights” feature where you are able to finally simulate a short strategy more closely and identify if your strategy really does make money.

The first thing you need is a strategy. For the purpose of this article, I’m going to quickly throw together a short strategy. Now, this strategy is a total hack, so I wouldn’t use it, but I wanted to include it in order to give you the full story as we continue throughout this article.…