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.
November 2, 2017

Ranking the Growth of Free Cash Flow and Finding the Leaders

Intuitively, most investors would assume that consistent growth in free cash flow within a company, would result in a high performing stock. Well today we’re going to test out that theory with the “Free Cash Flow Growth Leaders Stock Screener”. With this screener, we’re looking for:

· Large and stable companies; companies that have a market cap over a billion dollars sectioned off into their respective sectors.

· Companies that rank in the top 15% of their sectors for free cash flow growth over the last trading year as long as their FCF is greater than 0.

We plotted two extra variables, capital expenditures and sales growth.…

October 26, 2017

Investment Green Flags – Decreasing Shares Outstanding

Share Buyback Programs

A company purchasing back its shares tends to increase the stock price for a couple of reasons. First, it shows that the firm and its employees are confident in the direction the company is heading, and second, it cuts down on the shares available for investors to purchase purchasing the price up through basic supply and demand.

Below, we’ve outlined one of our green flag indicators “Decreasing Shares Outstanding” which can be found within our Green Flags Score.

Like all green flags, we want to keep this to be as simple as possible. We are building a piece of a larger score, not an entire screener.…

October 12, 2017

Investment Green Flags – High F-Score

High Piotroski F-Score

 

A recurring name throughout our software and website, the F-score has been continuously tested under many different circumstances and never ceases to amaze me. It may be simplistic, but, when used correctly, can be a very powerful tool for your portfolio.

For this Green Flag we want to look at the two calculations we have in the system for the Piotroski F-Score – Yearly and Trailing 12 Months. If you are unsure of the difference, the yearly score is based on the most recent annual data, while the T12M relies on the four most recent quarters. This slight difference just means that the T12M score is two-quarters ahead of the yearly score data wise.…

September 14, 2017

Investment Green Flags – Increasing Sales and High Asset Turnover

Revenue Growth and High Asset Turnover

 

When it comes to finding green flags, sometimes the simplest idea is the best. In the case of our flag – Revenue Growth and High Asset Turnover – we look for just that. It’s pretty self-explanatory that if a company is bringing in more money and is selling products faster than anyone else, it will likely increase in price long-term.

In this flag, we’ve kept it fairly simple by looking for the following –

  • Within the past trading year, the total revenues must be larger than they were a year ago. This must be true for all points throughout the year.
August 15, 2017

Learning about Green Flags and their score

Green Flags

Now that we’ve gone over red flags, it’s time to look at the other side of the equation and learn about green flags.

In our previous article, we discussed that red flags don’t necessarily mean that an investment is going to lose money. Green Flags are the polar opposite from a red flag, but it still doesn’t guarantee anything. A company could have every green flag raised and still lose money over the time you hold it. However, green flags do indicate that a company is less likely to be a dud and increase your chances of long term success.…

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 27, 2017

Institutional Ownership

  Institutional ownership is something that is often associated with hedge funds, mutual funds, and pension funds. So what is it exactly? Well, simply put institutional ownership is the ownership stake in a company that is held by large financial organizations. Institutions generally acquire large chunks of a company’s outstanding shares and can apply considerable influence on its management. In this article, we will take a look at the performance of companies with large institutional ownership against the performance of companies with low institutional ownership, and also the performance of a particular hedge fund and their institutional ownership in a company.  

  Let’s start with the large institutional ownership.…

March 20, 2017

Are Solid Companies Really that Solid?

Firing on all four Cylinders

The world is run by computers. Almost every field has been automated to a degree that the workplace wouldn’t be able to really function without technology, and finance is no exception. With HFT firms and algorithms dictating how we trade, let’s take a step back and assess the fundamentals. How integral is strong corporate performance, through the relationships between profit margin, income growth, revenue growth, and profit margin growth, to being a successfully traded company on the market.

clip_image001

For this, we will be exploring the recently designed “Firing on all four cylinders” screen which can be found under the informative section of the Equities Lab software.…

March 5, 2017

Correlation Between Earnings and Close

Plotting the distance

Having not read anything written on Seeking Alpha in some time, it was nice to see Chuck Carnevale’s articles again using strong fundamentals and taking a look at the big picture of investing rather than the short term trading that takes place today. In the specific article that I was reading I saw that he was using (insert name of program here) to plot the stock price and that company’s earnings to compare. It got me thinking, can I do this in Equities Lab, and better yet, can I take it a step further.

Let’s make $SIRI our example company, let’s go ahead and plot the earnings.…