The New Constructs overall rating is a function of 5 underlying metrics. We divide these metrics into two categories: Quality of Earnings Metrics and Valuation.
The New Constructs overall rating is a function of 5 underlying metrics. We divide these metrics into two categories: Quality of Earnings Metrics and Valuation.
The Quality of Earnings metrics in our ratings (Economic Earnings and ROIC) are primarily based on the data we collect from annual & quarterly reports, e.g. 10-Ks & 10-Qs.
All valuation metrics in our ratings (FCF Yield, Price-to-EBV Ratio, and Growth Appreciation Period) incorporate the stock’s daily closing price. These metrics change as prices change - sometimes causing a ratings change. Growth Appreciation Period can also change when we update the forecast in our models with new consensus revenue estimates. We update our forecasts at least once a quarter.
We review all the public company filings with the SEC daily. Anytime a new 10-K, 10-Q or amended filing comes out, we update our models immediately.
Review the details on our stock ratings and their meanings here.