Intelligence

Executive Summary

The New Executive Summary Explained

StockPointer subscribers have access to a revamped Executive Summary that provides more analytics to simplify interpretation.

In addition to the upgraded user-interface, three new features have been added:

  • Upgraded Intrinsic Value display
  • New performance indicators
  • New data points

Download User Guide

Quote Box

Quote box summarize daily information on the company. It contains essential information on the company including dates, currencies, company location.

Sector and Industry Identifies the sector and industry that the company is part of.
The Report title indicates the quarter and fiscal year of the report. It also displays the date that the data was generated. Usually the date generated is the previous day. Beside the line, you might see a warning icon, that will appear when the next financial statement is expected soon or it’s late.
The field displays the fiscal year-end of the company and the most recent financial statement as well as when the financial statement was available.
The field currency informs the currency of the report as well as if the data is in millions or thousands.

Intrinsic Value

StockPointer® evaluates the intrinsic value of a company by adding the current value of the company and estimating the present value of Economic Profit generated by the company over time.

The StockPointer® intrinsic value (IV) is the value of the company based on the Economic Profit (EVA) contribution of the company and the estimated future EVA. It is estimated by obtaining the present value of the sum of discounted future EVA and adding the current value. If the IV is negative, we default the value to $0.
The value of upside and downside from the previous closing stock price of the company. The formula is (intrinsicValue / stockPrice – 1) * 100. The intrinsic value is not always correlated to the stock price for various reasons, however look for trends on the chart below.
The intrinsic Value gauge displays: the most recent IV, and the highest and lowest IV quarterly values of the past five years. The 1y and 5y metrics are the rate of change in % during that period (it is different from a growth rate as it takes into consideration all the data points).
The Price to Intrinsic Value gauge displays: last quarter’s P/IV and current P/IV, and the highest and lowest P/IV quarterly values of the past five years. The 1y and 5y metrics are the rate of change in % during that period (it is different from a growth rate as it takes into consideration all the data points).
The Price to Intrinsic Value Adjusted gauge displays: last quarter’s P/IV adjusted and current P/IV adjusted, and the highest and lowest adjusted P/IV quarterly values of the past five years. The 1y and 5y metrics are the rate of change in % during that period (it is different from a growth rate as it takes into consideration all the data points).
Average intrinsic vlaue over that past 3 years.

KPI’s

This sections offers 4 key performance indicators and provides insight for interpreting the performance of a company.

Reputation (Market Value Added)

This key performance indicator is used to gauge the capacity of management to increase the value of the company. The market value added (MVA) is calculated by deducting the invested capital to the total market value. This KPI calculates the percentage of MVA of the market capitalization. The higher the percentage, the higher the reputation. On the other hand, a negative MVA means that the company has an unattractive reputation.

Effective management will grow the MVA and bad management will destroy the MVA.

The reputation returns stars based on the most recent % of MVA on market cap.
The Direction showcases the general trend of the reputation over the past two years. Effective management will improve the MVA.
The Trend indicates the short-term trend of the reputation in the last 12 months. This short term metric may signal a possible future change in reputation.
The value in the circle represents the percentage of FGV on market cap. and the shaded region of the circle represents the percentile ranking of the company.
The chart displays the % of FGV to market cap over the last 5 years
The table displays the current operating value growth over 1 year and 3 years. This is the growth of the actual profits the company is generating.

Percentage Future Growth Value On Market Capital

This key performance indicator is important to evaluate if the stock price is fairly valued. The future growth value (FGV) is calculated by deducting the current operating value of the company from the total market value. In addition, the FGV is the net present value of all future EVA.

This is a complex KPI. Firstly, you must look at whether or not the FGV is in line with the company’s current situation. For example, we expect a high FGV for growth stocks and almost no FGV for a slow or no growth company. Companies can sometimes trade at a discount or at a premium. For example, a growth stock with a declining FGV growth but rising EVA growth signals a bullish forecast.

Economic Performance Index

The economic performance index (EPI) is the main indicator to identify how much wealth is redistributed to the shareholders. The higher the better, and a negative EPI means that the company is not covering its costs of capital.

The value in the circle represents the EPI. and the shaded region of the circle represents the percentile ranking of the company.
The chart displays the performance spread over the last 5 years. The spread is the difference between Return on Capital (ROC) and Cost of Capital (COC), whereas, the EPI is the ratio of ROC to COC.
The table displays the EPI change over 1 year and 3 years.
The symbol indicates if EVA and NOP are converging (>), diverging (<) or parallel (=); and the color refers to if the EVA trend is better than NOP or not (for example if the EVA is negative but rising, it will display a green pill to signal improving performance. EVA and NOP will be parallel if the difference is within 2.5%.
Displays the overall trend by focusing on the percentage difference between EVA and NOP over the last 3 years.
EVA – Here you will find the most recent EVA (in millions $) and the 3-year EVA change to get an idea of the overall trend of the company’s performance.
NOP – Here you will find the most recent NOP (in millions $) and the 3-year NOP change to get an idea of the overall trend in company profits.

EVA Versus Net Operating Profit

This KPI is very useful for understanding the correlation between economic value added (EVA) and net operating profit (NOP). If both the NOP and EVA have the same slope they will be given a parellel and green signal. If both the NOP and EVA are sloping up but the NOP is flatter, it will have a converging and green signal. If both the NOP and EVA are sloping up but the EVA is flatter, it will have a diverging and red signal.

Detailed Information

This section presents information in four sub-sections.

  • Intrinsic Value
  • Market Performance
  • Economic Performance
  • Accounting Performance

You can view the sections as separate tabs or as a complete list by changing the display on the right.

This tab shows the performance and valuation metrics.

Here you have the performance and valuation calculations for the past 5 years, based on either a trailing 4 quarters (TTM) or trailing 12 quarters (T36M).
There are 2 separate hyperlinks that lead you to the detailed calculations for both NOPAT and Capital. Note: the data in those hyperlinks are on an annual basis and not a quarterly basis as that appearing throughout the Executive Summary.
To change the display from a shorter term to a longer term view. Select between last 4 quarters or last 12 quarters based on your preferences.
Stock price versus intrinsic value trend lines.

The Market Performance tab displays TTM and quarterly MVA and FGV information for the last 5 years.

The chart displays quarterly or TTM data
The chart displays quarterly of TTM data

The Market Performance tab displays TTM and quarterly NOPAT and EVA information for the last 5 years.

The chart displays quarterly or TTM data

The Market Performance tab displays TTM and quarterly accounting information for the last 5 years.

The chart displays quarterly or TTM data