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Dividend Paying Strong Balance Sheet Stocks

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                          Decile                                          Color Code
                          1 / Top
                              2
                              3
                              4
                              5                        the number inserted in each cell on the color-coded
                              6                          scoring summary, is the rank for the respective
                              7                                        stock and variable
                              8
                              9
                        10 / Bottom

RANK on total score, TICKER, STOCK, INDUSTRY, SECTOR, CODE rank on market cap (not factored in scoring)

1          RETURN ON EQUITY (roe)
            After tax profits earned for all the shareholders expressed as a percentage. The return on equity percentage is ca
            the company’s net income by the total shareholders equity.
            Latest 4 Quarters EPS / {[(Latest Quarterly Common Equity from the Balance Sheet + Common Equity 4 Quarters
            Sheet) / 2] / Shares Outstanding}

RETURN ON EQUITY 5-YEAR AVERAGE
RETURN ON EQUITY RELATIVE TO 5-YEAR AVERAGE


2          RETURN PRE-TAX ON ASSETS (roa)
             The measure of profit in dollars generated by a company’s assets expressed as a percentage.
             (Latest 4 Quarters EPS / Tax Rate Complement) / [Average of (the Latest Quarterly Total Assets + Total Assets 4
             Shares Outstanding]

RETURN ON ASSETS 5-YEAR AVERAGE
RETURN ON ASSETS RELATIVE TO 5-YEAR AVERAGE

3          RETURN ON CAPITAL (roc)
             The measure of profit in dollars generated by a firm’s total invested capital (Total Stockholder’s Equity + LT Debt
             Latest 4 Quarters EPS / {[(Latest Quarterly Long Term Debt + Latest Quarterly Stockholder’s Equity + 4 Quarters
             Equity) / 2] / Shares Outstanding}

RETURN ON CAPITAL 5-YEAR AVERAGE
RETURN ON CAPITAL RELATIVE TO 5-YEAR AVERAGE

4          EBITDA (ebitda)
EBITDA MARGIN
             Measure of operating profits expressed as a percent.
             [(Latest 4 Quarters EPS / Tax Rate Complement) + ((Latest 4 Quarters Income Statement Interest + Annual Cash
             and Amortization) / Shares Outstanding)] / (Latest 4 Quarters Revenue / Shares Outstanding)
EBITDA PER SHARE
                         Company’s operating profit prior to paying interest and taxes
(Latest 4 Quarters EPS / Tax Rate Complement) + [(Latest 4 Quarters Interest Expense + Annual Depreciation and Amortization) /
Current Shares Outstanding
EBITDA 5-YEAR AVERAGE
EBITDA RELATIVE TO 5-YEAR AVERAGE


5           NET PROFIT MARGIN (npm)
              Measure of how much a company retains for each dollar of sales after operating expenses.
              Net profit margin equals net income before extraordinary gains or losses as a percentage of sales or revenues.
              Latest 4 Quarters EPS / (Latest 4 Quarters Revenue / Shares Outstanding)

NET PROFIT MARGIN 5-YEAR AVERAGE
NET PROFIT MARGIN RELATIVE TO 5-YEAR AVERAGE


6           ACCOUNTING IRREGULARITIES & EARNINGS PURITY % (acct)
              This figure allows the user to see how often a company has relied on write-offs to compensate for low or negative
              This variable is overweighted in this model. A low (red) score in this, in effect translates into an artificially deflated
              1- [Absolute Value (Sum of Write-Offs for the Trailing 12 Quarters of Reported Fiscal Earnings)] / Sum of Operatin
              Trailing 12 Quarters of Reported Fiscal Earnings

3-YEARS W/O                             Number of Write-Offs in the past 12 quarters.
# QUARTERS W/O %                        Write-Offs displayed as a % of earnings for the past three years.
EARNINGS DIFFERENTIAL                   Measures the amount that the operating earnings are overstated (understated) versus what
                                        has been reported in SEC filings over the last 12 quarters.

7           EARNINGS MOMENTUM VALUE (eps m)
              How well a stock’s earnings compare with those stocks in the S&P-500. If a stock is in the top decile, it is outperf
              90% of the companies in the report. A method of seven rolling 4 quarter forward weighted
              (.1 X 5, .2 & .3) periods are used, with the most recent quarter receiving a .3 weight.

8           REVENUE GROWTH (rev gr)

REVENUE % CHANGE 2005 VS 2004, REVENUE % CHANGE 2006 VS 2005
REVENUE % CHANGE 2007 VS 2006, REVENUE % CHANGE 2008 VS 2007
REVENUE # OF POSITIVE GROWTH QUARTERS, REVENUE 3-YEAR HISTORICAL GROWTH RATE
REVENUE 5-YEAR HISTORICAL GROWTH RATE, REVENUE 10-YEAR HISTORICAL GROWTH RATE


9           EARNINGS PER SHARE GROWTH (eps gr)

EARNINGS # OF POSITIVE GROWTH QUARTERS
The number of quarters with sequential increases in earnings

EARNINGS 3-YEAR HISTORICAL GROWTH RATE
The slope of the Least Squares Regression Line which is fitted to the data. The data is expressed in terms of a 4 Quarter Moving Average.

EARNINGS 5-YEAR HISTORICAL GROWTH RATE, EARNINGS 10-YEAR HISTORICAL GROWTH RATE
EARNINGS STABILITY R-SQUARED
            Measures the deviation of a company’s earnings from its historical growth rate
R2, where R = [n(SXY)-(SX)(SY)] / the square root of [(nSX2-(SX)2)(nSY2-(SY)2)]
& N=number of time periods used (20); Y=4 Quarter Moving Average starting 23 quarters ago; X=the corresponding time period; S=Sum of

EARNINGS LONG-TERM FUTURE GROWTH RATE
Long Term Secular Growth Rate estimated for a period of three to five years, from First Call contributing analyst estimates

10          BETA VS SPX (beta)
              Measures volatility of a stock’s price relative to the S&P-500 using weekly prices over a 5-year period. A minimum
              is required (if five years is not available). In this risk averse biased model, low beta is looked upon favorably, and
              penalized.

11          % OF LONG-TERM DEBT TO CAPITAL (debt)
            Long Term Debt / (Long Term Debt + Stockholders Equity)

12          STABILITY & GROWTH (stab gr)

EARNINGS LATEST 4 QUARTERS VERSUS PRIOR 4 QUARTERS, EARNINGS CURRENT FISCAL YEAR VERSUS PRIOR YEAR,
EARNINGS NEXT YEAR VERSUS CURRENT YEAR
EARNINGS % CHANGE 2005 VS 2004, EARNINGS % CHANGE 2006 VS 2005
EARNINGS % CHANGE 2007 VS 2006, EARNINGS % CHANGE 2008 VS 2007

13          DIVIDEND & REINVESTMENT YIELD (div I)

DIVIDEND YIELD LATEST 12 MONTHS, DIVIDEND LATEST 12 MONTHS
DIVIDEND PAYOUT RATIO
The percentage of earnings paid out in dividends including year end extra dividends. Special dividends are excluded from the calculation.
Sum of the latest 4 Qtrs. Dividends / Sum of the latest 4 Qtrs. Earnings

DIVIDEND 5-YEAR GROWTH
The slope of the Least Squares Regression Line which is fitted to the data. The data is expressed in terms of a 4 Quarter Moving Average.
Note: This same method is used to calculate the Earnings & Revenue 5-year Growth Rates. Extraordinary Dividends are excluded.
DIVIDEND LONG-TERM FUTURE GROWTH RATE, DIVIDEND INCREASE LATEST 5 YEARS
NOTE: ADDITIONAL VARIABLES WEIGHTED IN COLUMN 22

14          PRICE TO BOOK RATIO (pbk)
            Current Price / Most recent Book Value Per Share

PRICE TO BOOK RATIO 5-YEAR AVERAGE
Average Price for each of the past five calendar years / Corresponding Fiscal Year Book Value
PRICE TO BOOK RATIO RELATIVE TO 5-YEAR AVERAGE
            Price to Book / Price to Book 5-Year Average
BOOK VALUE PER SHARE
                         Worth of a company if it were liquidated
                                          Latest Common Equity / Shares Outstanding

15          PRICE DEVIATION (base)
               Markets tend to over-react to good news and bad news. This variable can identify such cases, by highlighting th
               price from the stock’s median price premium over all the years data available for the respective stock. A strong (
               identifies stocks that are temporarily out of favor and undervalued. A weak (red) reading would point at possible
               identifies stocks that are temporarily out of favor and undervalued. A weak (red) reading would point at possible
               speculation and upwards price movement not supported by fundamentals and valuation.


STANDARD DEVIATION PRICE VERSUS VALUATION
Represents the deviation between the current price and the median price premium over all the years of data available for each stock.


16          PRICE RELATIVE TO MOVING AVERAGES (rel to ma)

PRICE RELATIVE TO 200-DAY MOVING AVERAGE, PRICE RELATIVE TO 50-DAY MOVING AVERAGE
PRICE RELATIVE TO 30-DAY MOVING AVERAGE, 50-DAY MA RELATIVE TO 200-DAY MA


17          NET INSIDER BUYS (inside)

                For the past three months, the net change of number of transactions of insider trading. Note: If there was one $
                $1000 sells, then this would register here as a “negative”. This can be deceiving because there was actually ne
                terms. This does not get significant weight in the model. If a very strong or weak signal is received on this varia
                manually checked and a footnote will be added to the report if necessary. Number of Buys - Number of Sells.

18          PREDICTABILITY VERSUS VOLATILITY (safe)
               Result from a computerized scoring system and a qualitative evaluation of the growth and stability of a company
               dividends over a ten-year period.

19          PRICE TO CASH FLOW
Current Price / Most recent Cash Flow for the last 4 Quarters EPS
                         Where CF = Net Income plus Depreciation & Amortization

CASH FLOW TO EARNINGS RATIO
         Cash Flow / Latest Fiscal Year Earnings

CASH FLOW PER SHARE
                  Net Income + Depreciation & Amortization


20          RELATIVE PRICE TO CASH FLOW

PRICE TO CASH FLOW 5-YEAR AVERAGE, PRICE TO CASH FLOW RELATIVE TO 5-YEAR AVERAGE

21          PRICE TO FREE CASH FLOW
              Current Price / [(Cash from Operations minus Fixed Asset Expense minus Dividends Paid) / Shares Outstanding]
              Capital Expenditure minus Sale of Property, Plant & Equipment (PP&E)

FREE CASH FLOW PER SHARE
Amount of disposable cash available to a firm after it has met its discretionary expenditures
             For Banking & Insurance:
(Latest Annual Cash from Operations – Latest Annual Fixed Asset Expense – Latest Annual Dividends Paid) / Current Shares Outstanding
For Industrials:
(Latest Annual Cash from Operations – Latest Annual Capital Expenditure – Latest Annual Dividends Paid) / Current Shares Outstanding


22          DIVIDEND YIELD (div II)
            For regular dividend paying companies:
Latest Quarter Dividend X 4 / Current Price

DIVIDEND YIELD 5-YEAR AVERAGE
For each of the last 20 quarters, take the Dividend and divide it by the Average High and Low price. Take the average of those 20 figures.

DIVIDEND YIELD 10-YEAR AVERAGE
DIVIDEND YIELD TO 5-YEAR AVERAGE
          Current Dividend Yield relative to 5-year average Dividend Yield
          Dividend Yield / 5-Year average Dividend Yield

DIVIDEND YIELD TO 10-YEAR AVERAGE, DIVIDEND INDIVIDUAL RATE
NOTE: ADDITIONAL VARIABLES WEIGHTED IN COLUMN 13

23          RELATIVE STRENGTH NUMBER (rel str)
              Compares absolute and relative change in stock price versus the the market over the past 4 quarters. Most recen
              double (40%) weight.

AVERAGE DAILY VOLUME SINCE JANUARY 1
AVERAGE DAILY VOLUME LAST 30 DAYS, AVERAGE DAILY VOLUME LAST 12 MONTHS


24          PRICE MOMENTUM VALUE (pr mom)

52-WEEK HIGH, 52-WEEK LOW, 5-YEAR HIGH, 5-YEAR LOW

25          PRICE TO SALES (ps)
Current Price / [Latest 4 Quarters Revenues / (Current Shares Outstanding / 1,000,000)]

PRICE TO SALES RATIO LATEST 4 QUARTERS, PRICE TO SALES RATIO FORWARD 4 QUARTERS
PRICE TO SALES RATIO CURRENT YEAR, PRICE TO SALES RATIO NEXT YEAR
PRICE TO SALES RATIO 2005, PRICE TO SALES RATIO 2006, PRICE TO SALES RATIO 2007


26          RELATIVE PRICE TO SALES (rel ps)

PRICE TO SALES RATIO 5-YEAR AVERAGE
PRICE TO SALES RATIO RELATIVE TO 5-YEAR AVERAGE

27          OFF 52-WEEK HIGH / LOW (off hi / lo)

PRICE PER SHARE, % BELOW 52-WEEK HIGH

              What is done by the model with this figure, and other technical indicators is proprietary. What can be revealed, is
              recommendations) the model tries to identify stocks with “good” technicals combined with “poor” scores on valuat
              fundamentals and balance sheet. In effect, this creates a contrarian element. Conversely, the model tries to iden
              “poor” technicals combined with “high” scores on valuation, fundamentals and balance sheet (aka “good” compan
              out of favor).

% ABOVE 52-WEEK LOW

28          EARNINGS PREDICTABILITY (pred)

REVISIONS CURRENT YEAR % CHANGE 3-MONTHS
(Current Consensus – Consensus from three months ago) / Absolute Value (consensus from three months ago)

REVISIONS CURRENT YEAR % CHANGE 6-MONTHS, REVISIONS NEXT YEAR % CHANGE 3-MONTHS, REVISIONS NEXT YEAR % CHANGE 6-MON
CURRENT YEAR HIGHEST EST, CURRENT YEAR LOWEST EST, CURRENT YEAR # OF UP REVISIONS 1- MONTH, CURRENT YEAR # OF DOWN RE


EARNINGS ESTIMATES # ANALYSTS NEXT YEAR
               In order for this variable to be given full weighting, the model requires a statistically significant sample of data size
               conclusion, usually three or four estimates. The assumption is that their will be a lower frequency of skewed resu
               between a company’s earnings and estimates will be less volatile as the coverage increases.

NEXT YEAR HIGHEST ESTIMATE, NEXT YEAR LOWEST ESTIMATE, NEXT YEAR # OF
UPWARD REVISIONS 30 DAYS, NEXT YEAR # OF DOWNWARD REVISIONS 30 DAYS


29           P/E RELATIVE TO SPX (pertix)
             Price to Earnings ratio relative to the S&P-500
Price to Earnings ratio of the most recent 4 quarters / P/E for the S&P-500 for the most recent 4 quarters
P/E 2005 RELATIVE TO SPX, P/E 2006 RELATIVE TO SPX
P/E 5-YEAR TO SPX HIGH, P/E 5-YEAR TO SPX LOW

30           P/E RELATIVE TO ITS HISTORICAL TRADING RANGE (perhis)

P/E 5-YEAR AVERAGE HIGH, P/E 5-YEAR AVERAGE LOW, P/E 5-YEAR AVERAGE
              For each of the most recent 20 quarters, including the present quarter, take the average of the high and low price
              sum of the trailing 4 quarter earnings at that time; the 4 quarters previous to the price quarter being looked at. Av
              figures to obtain the 5-year average.

P/E TO 5-YEAR AVERAGE, P/E 10-YEAR AVERAGE, P/E TO 10-YEAR AVERAGE


31           PRICE TO EARNINGS RATIO (blend)

P/E LATEST 4 QUARTERS TRAILING EARNINGS
Price to Earnings ratio of the most recent 4 quarters
Current Price / Sum of Latest 4 Quarters Earnings

P/E 2005
P/E 2006 ESTIMATE
Price to Estimated Earnings ratio for Fiscal 2006
                         Current Price / Sum of Quarterly Earnings Estimates for Fiscal 2006
P/E 2007


32           P/E/G RATIO (peg)

2005 P/E/G
2006 P/E/G
            2006 Price to Earnings ratio to Long-Term Future Growth Rate
P/E based upon 2006 Estimated EPS / Earnings Long-Term Future Growth Rate.
Must be a prospective P/E (not trailing) Example: 2006 P/E = 18, LTGR = 12%, then P/E/G = 1.5
2007 P/E/G

see important notes on next page
To the immediate right of the the 32 groups on the color-coded scoring table (columns numbered 1 through 32),
you will see seven columns headed with Roman numerals. Below is the explanation for those columns.


I           POINT DEDUCTIONS (deducts)
             Total point deductions for the 32 groups. The highest scoring stocks in the report will have the lowest number in th
             should see the number increase as you scroll down the page, and the color code will start at dark green and chan
             before reaching the bottom (red) of the page.

II          VALUATION SCORE (t val)
              Total point deductions on the valuation groups, variables (and ratios). Stocks with the lowest number [point dedu
              have the most attractive valuation, and vice versa.

III         FUNDAMENTALS SCORE (t fund)
              Total point deductions on the fundamental groups, variables (and ratios). Stocks with the lowest number [point d
              column, have the strongest fundamentals, and vice versa.

IV          PROPRIETARY SCORE (t prop)
              Total point deductions on the proprietary groups, variables (and ratios). Stocks with the lowest number [point ded
              column, scored highest on proprietary issues and vice versa.

V           MISCELLANEOUS (t misc)
               Total point deductions on the miscellaneous variables. There were some variables that do not fit in the other fou
               fundamentals, proprietary, technicals] categories. Stocks with the lowest number [point deductions] in this colum
               this group, and vice versa.

VI          TECHNICALS (t tech)
              Total point deductions on the technical indicators and variables. Stocks with the lowest number [point deductions
              the “strongest technicals”, and vice versa. Do not assume, that a high score in this group is looked upon favorab
              over-react to good news and bad, and at the extremes strong and weak technicals scores can be contrarian indic
              they conflict with scores on valuation and fundamentals. What is done by the model with this figure, and other te
              proprietary. What can be revealed, is that (for short recommendations) the model tries to identify stocks with “go
              combined with “poor” scores on valuation, fundamentals and balance sheet items. In effect, this creates a contra
              Conversely, the model tries to identify stocks with “poor” technicals combined with “high” scores on valuation, fun
              balance sheet items, also known as “good” companies temporarily out of favor, with significant upside potential.


VII         TOTAL SCORE (t score)
              This is the total score based on the figures in columns II through VI expressed in percentage terms. I would usua
              attention on the top decile (10% highlighted in dark green) for long (accumulate) ideas, and the bottom decile (10
              red) for short sell (liquidation) ideas. It should be noted, that the scores in columns II through VI are not equally w
              final ranking (total score).



Miscellaneous

EARNINGS LATEST 4 QUARTERS, EARNINGS 2005
EARNINGS ESTIMATE 2006
First Call Consensus of all individual broker estimates.
EARNINGS ESTIMATE 2007, EARNINGS ESTIMATE 2008
LATEST EARNINGS SURPRISE %
[Reported EPS minus Consensus] / Consensus
PRICE IMPACT EARNINGS SURPRISE
The change in price vs. the S&P-500 from two days before to one day after the date of the Earnings Report.

NEXT EXPECTED EPS DATE
MARKET CAPITALIZATION
         Current Price X Shares Outstanding

# SHARES OUTSTANDING
                Total number of shares outstanding, including all classes of common stock. Excludes preferred stock, warrants
                shares outstanding reflect the number of ADR’s.

INSTITUTIONAL HOLDINGS %
            Percent of stock owned by major institutional investors

AVERAGE YEARLY PERCENT CHANGE 5 YEARS, AVERAGE YEARLY PERCENT CHANGE 10 YEARS,
REVENUE LATEST 4 QUARTERS, REVENUE PER SHARE LATEST 4 QUARTERS
REVENUE 2005, REVENUE ESTIMATE 2006, REVENUE ESTIMATE 2007, REVENUE ESTIMATE 2008

REINVESTMENT YIELD
Amount available to be plowed back into a company expressed as a % of price
(Earnings for thr Latest 4 Quarters minus Dividends for the Latest 4 Quarters) / Current Price

ENTERPRISE VALUE TO EBITDA RATIO
         Multiple of private market value to core operating earnings

              (Current Price + [(Quarterly Balance Sheet Long Term Debt + Quarterly Balance Sheet Short Term Debt + Quarte
              Preferred Equity – Quarterly Balance Sheet Cash – Quarterly Balance Sheet Short Term Investments) / Shares O
              ((Latest 4 Quarters EPS / Tax Rate Complement) + ((Latest 4 Quarters Interest Expense + Annual Depreciation a
              Current Shares Outstanding))

ENTERPRISE VALUE PER SHARE
               Theoretical takeover price of a company. This is a better measure of a company’s value (as a takeover target) th
               capitalization. It takes into account the debt the acquiring party has to assume minus the cash and cash equivale
               party expects to receive.
               Current Price + [(Quarterly Balance Sheet Long Term Debt + Quarterly Balance Sheet Short Term Debt + Quarte
               Preferred Equity – Quarterly Balance Sheet Cash & Equivalents – Quarterly Balance Sheet Short Term Investme
               Outstanding]
th] format with 0.75 inch margins and reduction



                     Shade
                     Green
                   Sea Gren
                      Lime
                 Bright Green
                  Light Green
                      Tan
                      Gold
                 Light Orange
                    Orange
                      Red




urn on equity percentage is calculated by dividing

 + Common Equity 4 Quarters ago from the Balance




y Total Assets + Total Assets 4 Quarters ago) /




tockholder’s Equity + LT Debt).
ckholder’s Equity + 4 Quarters ago Stockholder’s




tement Interest + Annual Cash Flow Depreciation
tion and Amortization) /




entage of sales or revenues.




ompensate for low or negative earnings. Note:
ates into an artificially deflated P/E/G ratio.
al Earnings)] / Sum of Operating Earnings for the




(understated) versus what




s in the top decile, it is outperforming more than




 of a 4 Quarter Moving Average.
sponding time period; S=Sum of …



nalyst estimates



       year period. A minimum of 52 weeks of data
is looked upon favorably, and high beta is




R VERSUS PRIOR YEAR,




e excluded from the calculation.




 of a 4 Quarter Moving Average.
 Dividends are excluded.




such cases, by highlighting the deviation in stock
e respective stock. A strong (green) reading,
ading would point at possible instances of
ading would point at possible instances of




a available for each stock.




ding. Note: If there was one $15,000 buy and ten -
because there was actually net buying in dollar
signal is received on this variable, files will be
            Number of Sells.



wth and stability of a company’s earnings and




ds Paid) / Shares Outstanding] Where FAE =




d) / Current Shares Outstanding

 / Current Shares Outstanding
 he average of those 20 figures.




e past 4 quarters. Most recent 3-month period gets




ary. What can be revealed, is that (for short
d with “poor” scores on valuation,
versely, the model tries to identify stocks with
 ce sheet (aka “good” companies temporarily
NS NEXT YEAR % CHANGE 6-MONTHS,
H, CURRENT YEAR # OF DOWN REV 1- MONTH




 significant sample of data size in order to draw a
ower frequency of skewed results and deviations
 ncreases.




rage of the high and low price and divide it by the
 e quarter being looked at. Average these 20
ll have the lowest number in this column. You
l start at dark green and change at every decile




he lowest number [point deductions] in this column,




 ith the lowest number [point deductions] in this




h the lowest number [point deductions] in this




s that do not fit in the other four [valuation,
 point deductions] in this column, scored highest in




west number [point deductions] in this column, have
  group is looked upon favorably. Markets tend to
 scores can be contrarian indicators especially if
el with this figure, and other technical indicators is
 ries to identify stocks with “good” technicals
 In effect, this creates a contrarian element.
  high” scores on valuation, fundamentals and
h significant upside potential.




ercentage terms. I would usually focus my
eas, and the bottom decile (10% highlighted in
 II through VI are not equally weighted in the
des preferred stock, warrants and options. Foreign




heet Short Term Debt + Quarterly Balance Sheet
 Term Investments) / Shares Outstanding)] /
pense + Annual Depreciation and Amortization) /




value (as a takeover target) than market
us the cash and cash equivalents the acquiring

eet Short Term Debt + Quarterly Balance Sheet
e Sheet Short Term Investments) / Shares

				
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Description: Dividend Paying Strong Balance Sheet Stocks document sample