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Pascal Lefrancois

StockPointer® US and ADR Equities Model Portfolio Transactions – September 2019

StockPointer® US and ADR Equities Model Portfolio Transactions – September 2019

We have rebalanced the Nasdaq Inovestor Global Index based on our US and ADR Model Portfolios, which will be effective on September 20th after market close. Here are the details for the US Model Portfolio:

Ins:

1. Bristol-Myers Squibb Co. (BMY) – Market Trend. Increase in the Healthcare sector as seen in the Top 100 index, therefore, increasing our position in the portfolio.

2. Lamb Weston Holdings Inc. (LW) – Intra-sectoral transaction.

3. Progressive Corp (Ohio) (PGR) – Intra-sectoral transaction.

Outs:

1. Sally Beauty Holdings Inc. (SBH)– Market Trend. Decrease in the Consumer Discretionary sector as seen in the Top 100 index, therefore, decreasing our position in the portfolio.

2. Kroger Co. (KR) – Not in the top performers of its sector.

3. Blackstone Group Inc. (BX) – Not in the top performers of its sector.

Here are the details for the International Model Portfolio:

Ins:

1. Brookfield Infrastructure Partners L.P. (BIP) – Market Trend. Increase in the Utilities sector as seen in the Top 100 index, therefore, increasing our position in the portfolio.

Outs:

1. Unilever PLC (UL) – Market Trend. Decrease in the Consumer Staples sector as seen in the Top 100 index, therefore, decreasing our position in the portfolio.

Release Notes 20190705.1

Overview

This post details the changes that went into Production for Inovestor for Advisor on July 5th, 2019.

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

Release Notes 20190409.1

Overview

This post details the changes that went into Production for Inovestor for Advisor on April 9, 2019.

Release Notes 20180918.1

Overview

This document details the changes that went into Production for Inovestor for Advisor on September 18, 2018.

Score Card

The New Score Card Explained

As of September 18th, StockPointer subscribers will have access to a new ScoreCard that will provide more information and more accurate insights to investors. All legacy data remains but will now be displayed differently on the updated version of ScoreCard.

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

  • A new rating service that rates companies as Positive, Neutral, or Negative to provide a fundamental outlook of the company
  • A new factors exposure feature that scans the fundamentals of the company by looking at the quality, value, and growth factors as well as the risk exposure
  • Live market data versus the previous day data that featured in the older version

The menu has also been expanded to add a peers section and the navigation tab has been streamlined.

Download User Guide

Score Box

The SP Score is a proprietary scoring system based on StockPointer’s model. It’s a 12 factors algorithm and looks at quality and value factors. The weight for quality is 75% and 25% for value.

Positive Outlook: A company with sound financials who is generating higher returns on capital than costs of capital and who is trading at a reasonable price.

Negative Outlook: A company that is risky and creates very little to no wealth for its shareholders.

Neutral: The stock may have both positive and negative characteristics and fundamentally does not offer enough Quality and Value factors to score well.

This score represents the overall performance of a company by considering multiple risk and performance factors based on the StockPointer® model. A high score indicates a high-quality stock trading at a reasonable price.
The arrow and the number, represents the score variation since the last quarter.
The performance score is the performance portion of the overall score. By clicking on the information icon on the right, a detailed list of the different key performance indicators will be displayed.
The risk score is the risk portion of the overall score. Click on the information icon to obtain a detailed list of the different key performance indicators making up the score. This score evaluates the quality associated with the company. The lower the risk, the more likely the company will continue to perform well.
This figure represents the percentile ranking of the company based on its performance versus other companies listed in that country.
The line chart represents the TTM of the last available quarter and the 4 previous corresponding periods.
The upper card represents the 1y growth and the bottom card represents the 5y average growth.
The system rates the company: Positive Outlook, Negative Outlook and Neutral Outlook.
The factors exposure is meant to identify how a company is viewed based on numerous factors. The factors used to assess the company are listed under the “Peers” tab.
Quality – A green rating means that the company generates more wealth to its shareholders than the average. A red rating means that the company has unsustainable accounting performance and has a negative outlook.
Value – A green rating means that the company presents good value to investors. A red rating means that the stock is trading at a premium. Good quality and growth stocks will often trade at a premium.
Growth – A green rating indicates that the company is growing while a red rating indicates that either the company’s growth is slowing down or that the company is in a declining phase.
Risk – A green rating means that the company is less risky than the market and a red rating means that the company is riskier than the market.

Screener

Filtering Companies Or Funds

The new screener is a user-friendly feature used to allow subscribers to filter stocks or funds according to a specific criterion. The following features have been included in the upgraded version:

  • Three different datasets to filter from:
    • Stockpointer (same criteria and data found on previous version)
    • StockGuide
    • Fund (data on Canadian funds and ETFs).
  • An “Export To CSV” feature.
  • New screen-able filters such as SPScore, Risk Score, and ratios such as Debt-Equity and Interest Coverage.
To start building a new screener, click “Create New Screener”
To select an existing screener, choose one from the list or type the name of the screener in the search box. Screeners can also be filtered by type (Saved or Predefined)

How to filter

Whether predefined or custom screeners, users will be able to screen for companies or funds using an array of different filters. The filters vary between the companies and funds given the different datasets. The filtering behavior and user experience between both datasets are similar, however. All filters can be adjusted based on user preferences.

Search stocks based on the price of the previous day close and on the market value of capital or search funds based on NAVPS and AUM.
“Add Filters” function provides additional criteria to be included in the screener.
Display of all selected filters. All filters are modifiable.
While modifying a criterion, either a slider or list will appear to facilitate editing. Can show or hide filters.
When all applicable filters have been selected, click “Search” to screen all companies in accordance with the searched criteria. “Save Screener” provides the capability to retain the screened companies for future use. “Export to CSV” is a new functionality that allows the screener results to be exported to a CSV file.
Screener results are displayed in a list view. PfScan view provides a visual representation of the results.