Tuesday, November 11, 2008

Updated Equity Grading System

Sorry for the previous post with the spreadsheet on my personal grading system. It wasn't really a finished piece of work but now I have a more automated version that does all the computations for you.

Just plug in the numbers and it will automatically generate a score for your equity. I have removed the %K stochastic because it has nothing to do with the quality of a stock.

It simply measured the oversold, overbought aspects at any given time. This automatic spreadsheet simply helps you see the quality of a stock based on its performance. I hope you find it useful.

Have a good one,
Roger

Attachment: Rogers_Equity_Grading_System.xls [View on Google Docs]
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6 comments:

  1. I have a quick question about your grading system. I tried it out on a few stocks and i found lots of stocks on the NYSE and NASDAQ that do not have the info. Example, Quarterly Earningts Growth YOY, Return on Equity are either 0 or N/A on a lot of stocks. What do you suggest to put in the spreadsheet?? Thanks

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  2. You could try an average on what you have been seeing. I noticed that same problem when I started grading equities. I might devise something with info. that is always present. quarterly earnings growth varies so widely, I wouild be hesitant to throw anything there, but a middle of the road value would be 15 and return on equity 10.

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  3. Your equity sheet is helpful - thank you. I was trying to understand results so thought you could provide some clarity. I ran SWN and got -49, ran COP and got 51, ran FCX and got 42, WMT got a 13 and INTC and got 50. These stocks seem like solid stocks and ones that are quite low in price right now, so I had the underlying question of you have a grading system and it has certain parameters, what is the type of stock your grading system is highlighting and should the grading system/model results be interprted differently in this type of market?
    Thanks for your help
    Jennifer

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  4. Jennifer, you have brought up an excellent piont that made me realize that I should have named the tool " Swing Trading Equity Grading System ". The tool is only valid for stocks traded in this manner, which is the manner in which the SA software is intended. Grades generated are only valid on a month to month basis, and are not reflective of the long term quality of the equity. Sorry that I screwed-up on not being clearer on that point.

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  5. Your previous post with your old spreadsheet somewhat confused me when it comes to negative numbers. With your new spreadsheet, do you just plug in the numbers as they appear in Yahoo? For example, I have a stock with a quarterly earnings growth of -19.20 according to Yahoo. Do I just plug in that number into the spreadsheet?

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  6. Yes, I believe so. Also, that spreedsheet looks at a month to month basis, and is not indicative of the long term quality of an equity, mainly because of its dependence on the short share aspect.

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