A simple valuation score

a simple valuation score based on implied growth

I built a "valuation rank", which gives

  • 1 point to companies with an FCF implied growth equal or less than the analyst forecast
  • -1 point if this FCF implied growth is 10 percentage points higher than the actual forecast.
  • 0.5 point if the past FCF average growth is 5 pp higher than the implied growth
  • -0.5 point if the past FCF avg growth is 10 pp lower than the implied growth.

These ranges give me a kind of "safety margin". Every company with a forecast and cash flow positive can fare anything between -1.5 and +1.5. I published this experimental score for my watchlist here.

This simple valuation score compares analysts expected FCF growth with market expectation (aka implied growth)

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