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May 26, 2022

Putting Piotroski to the Test

What Is the Piotroski Score?

The Piotroski score is a 9 point checklist to determine if a company is healthy. The formula is pasted below, then explained.

  1. Is_profitable – making money gets you a point. Seems trivial, but money making companies are less likely to go out of business.
  2. Is_cash_flowing – companies with positive cash flow can spend that cash if needed.
May 21, 2021

Sector Booting using SCTR

Can we boost performance by getting rid of a couple of bad industries? Certainly. Can we do it via the SCTR? Maybe.

The best case: what future prediction can bring

Before we get started, we want to understand what perfect prediction could bring us.

This chart is what would happen, from 2000, if we could magically throw out the bottom 20% of these 11 sectors (usually 3), in terms of future performance next quarter.…

August 11, 2020
China Rising

The Consequences of COVID-19 on Chinese Manufacturing

COVID-19, initially spread throughout China, has now spread throughout the world, closing virtually everything. Some countries have gotten the virus under control, while others struggle to get back to normal. Surprising was the speed with which China was able to get the virus under control. For a country that people in the public health sector believed had not built the infrastructure to handle such an event, life there is getting back to normal slowly, but surely.…

February 20, 2020
CAPM Explained

February 2020 Release notes

We are proud to announce a new release of Equities Lab. We have a ton of new features, including some changes that might affect your current screens. Some of the highlights include more ADRs, new macro economic properties, and a fully functional stock simulator.
February 10, 2020

Expedia is in trouble. Should you sell it?

Expedia is desperate to improve their Earnings Yield. Is that a sign you should sell?
August 23, 2019

What does “S&P-like” mean, anyways?

In a previous article, we compared the S&P 500 index to an EquitiesLab macro, issandplike. Our goal was to analyze the S&P’s value, by comparing the official index’s performance with a collection of similar stocks. But what does “similar” mean in this case?

According to Standard & Poor’s website, an S&P stock must meet the following requirements.…

July 28, 2019

Net Income Verses Free Cash Flow

Show me the money

People look at net income, otherwise known as just earnings, as well as Free Cash Flow to decide whether they like a company. Why? Net income is the “real” income the firm makes, but it has one weakness: it doesn’t actually track money coming into (or out of) the firm.…

May 15, 2019
Does the S&P 500 Cheat?

Does the S&P 500 cheat?

Introduction

The S&P 500 has performed spectacularly over the last seven years. So spectacularly, in fact, that some find its performance hard to believe. Are the stocks that make up the S&P being cherry-picked to only show the most successful performers? If the contents of this benchmark are not selected organically, its usefulness is suspect.…

March 26, 2019

Will The Real O’Shaughnessy Please Stand Up?

O’Shaughnessy’s screen focuses on low-cost tickers with small market caps. His reasoning goes that, as small as these companies are, most analysts ignore them. This lack of attention suggests that there quite a few diamonds in the rough within microcap stocks. Is he right?
March 15, 2019
Does Making Money Matter?

Should I Invest In Money Losing Companies?

A common theory is that a company making money will outperform a company that doesn’t. Is that really true? I am here today to test how companies that make negative money or no money do compared against the S&P 500.

The graph to the right shows a screener with companies not making money in green and the S&P 500 in brown.