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