Method

theScreener‘s approach to stock analysis

Our analyses are conducted twice a week (on Monday and on Wednesday) using the previous closing price.

theScreener‘s Star Rating System: Interest

theScreener‘s star rating system is designed to enable you to identify high-quality stocks quickly and easily.

 

In this easy-to-use rating system, stars are earned for each element specified below:

Earnings Rev Trend [visuel] =visuel
Valuation Rating [visuel],[visuel], [visuel] =visuel
MT Tech Trend [visuel] =visuel
4 week Relative Performance >1% =visuel

Therefore, a stock can earn a maximum of four stars. The lowest rating a stock can have is no stars.

 

Note: For each category, once a stock has earned its star it will keep it until:

Earnings Rev Trend The arrow turns red [visuel]
Valuation Rating The arrow turns red [visuel]or [visuel]
MT Tech Trend The arrow turns red [visuel]
4 week Relative Performance >1% Drops below (<−1%)

7wk EPS Rev

This is an abbreviation for 7 week Earnings Per Share Revision. This column concerns the value of these revised earnings. A figure of 2.8 implies that the analysts, compared with seven weeks ago, have now revised and raised their estimates by 2.8%. On the contrary, a negative number means that the earnings were revised at a lower estimate.

Earnings Rev Trend

The symbol [visuel] implies that compared with their earnings revisions of seven weeks ago, the analysts have now raised their estimates (7wk EPS Rev; > 1%); the symbol [visuel] indicates that compared with their earnings revisions of seven weeks ago, the analysts have now lowered their estimates (7wk EPS Rev <−1%).

 

When the earnings revisions (7wk EPS Rev) fall between +1% and −1%, the trend is considered to be neutral [visuel].
The symbol [visuel] indicates that the revisions previous to the neutral situation were positive.
The symbol [visuel] indicates that the revisions previous to the neutral situation were negative.

Valuation Rating

Our Valuation Rating indicates if a stock is selling at a relative premium or bargain price, based on its earnings potential.

 

To estimate a stock’s value relative to its current price our Valuation Rating combines:

  • stock price
  • projected earnings
  • projected earnings growth
  • dividends

 

There are five ratings, ranging from strongly undervalued [visuel] to strongly overvalued [visuel] (see below).

 

theScreener.com Valuation Rating (difference between projected value and current price)

MT Tech Trend

The MT Tech Trend indicates the current tendency, positive [visuel] or negative
[visuel], and the Tech Reverse indicates to which price this tendency is valid.
When a price falls between 1.75% above or below the Tech Reverse, the MT Tech Trend is considered neutral [visuel]. Once the price breaks out of the +1.75% neutral zone, the MT Tech Trend will change to positive or negative depending on the movement.
The symbol [visuel] indicates that the MT Tech Trend previous to the neutral situation was positive.
The symbol [visuel] indicates that the MT Tech Trend previous to the neutral situation was negative.

4wk Rel Perf

This figure measures the performance of a stock relative to its national or regional index (compared to four weeks ago).

LT Growth

This is the estimated annual growth rate of future earnings, normally projected over the next two to three years, and expressed as a percentage.

G/PE Ratio

It is the basis of our Valuation Rating. This is the estimated growth of future earnings (LT Growth) plus dividend in %, divided by the estimated future PE ratio (Long Term P/E).

Bad News Factor

To determine the « Bad News Factor » we analyze a stock’s declines in rising markets. In this purely objective analysis, the actual reasons for a stock’s behavior are not important. If a stock price falls while its relative index goes up, it can be assumed that the stock’s performance has been affected by bad news – hence the name, « Bad News Factor ».

 

The « Bad News Factor » shows the average deviation per bad news event between the stock and its reference index over the last 52 weeks. The « Bad News Factor » is expressed in basis points.

 

The higher the « Bad News Factor », the more a stock has been sensitive to bad news. The smaller the « Bad News Factor », the less the stock has been sensitive to bad news.

Bear Market Factor

To determine the « Bear Market Factor » we analyze the relationship between a stock’s price movements and declining markets, hence the name, « Bear Market Factor ».

 

The Bear Market Factor expresses in basis points the average difference over 52 weeks between the moves of the stock price and the moves of the reference and only during declines of the reference index.

 

The higher the « Bear Market Factor », the more a stock has dropped when its relative index dropped. A « Bear Market Factor » that is strongly negative means the stock has been more resistant to losses in declining markets.

Risk Zone

The price developments of stocks are generally volatile and contain high risks that can result in a total loss. Based on a their historical behavior, stocks are classified by risk levels. These risk levels have to be considered solely in relative historic comparison to other stocks. Please note that even « Low Risk » stocks are equities and therefore high risk investments that can lose up to all of their value, and that based on the past no firm conclusions can be taken into the future.

 

Risk zones are determined by measuring the « Bear Market Factor » and the « Bad News Factor » against a long term world reference.

 

There are three types of risk ratings:

 

  • Low Risk:
    Both risk measures are below the reference.
  •  

  • Medium Risk:
    At least one of the two risk measures is higher than the reference, but none of the values is higher than the reference plus one standard deviation.
  •  

  • High Risk:
    At least one of the two values is higher than the reference plus one standard deviation.

 

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