Rank: Advanced Member
Posts: 105
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The web-based TakeStock shows CVS with a Quality Index of 3.2, due to a Growth Index of 3.2 (the Efficienty Indicator is "green").
However, looking at the detail for the Growth Index, everything is shown to be OK. Predictability, Historical Growth and Recent Growth, for both Sales and Earnings, are all shown to be OK.
So, why is the overall Growth Index 3.2 (i.e., unacceptable).
-Jim Thomas
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Rank: Advanced Member
Posts: 82
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Jim:
I would imagine that it's because the EPS R-squared is below the "acceptable" 8.5. (You can often find the answer to these kinds of questions by consulting the Summary.)
This is another one of those cases where "drawing the line" makes for a rather arbitrary conclusion; but it shows the value of the advanced mode where you can override this kind of thing while keeping the novice away from this stock. |
Ellis Traub |
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Rank: Advanced Member
Posts: 105
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OK, but the TakeStock descriptions for CVS seem inconsistent to me.
In the detail for Growth, describing EPS Predictability, TakeStock says "Earnings growth is reasonably stable and predictable." The numerical value is 8.4 (BTW, is there a description somewhere that identifies 8.5 as the lower limit for "acceptable").
In the Summary (thank's for pointing that out), under Items to Check, it says "Earnings growth is unpredictable".
I don't think "unpredictable" and "reasonably stable and predictable" are equivalent.
-Jim Thomas
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Rank: Advanced Member
Posts: 126
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>OK, but the TakeStock descriptions for CVS seem inconsistent to me.
>I don't think "unpredictable" and "reasonably stable and predictable" are equivalent.
it doesn't make sense to me either in its current form. We'll research it further and post here when we have a better idea for implementation.
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Rank: Advanced Member
Posts: 126
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In regard to Jim's question here:
"The numerical value is 8.4 (BTW, is there a description somewhere that identifies 8.5 as the lower limit for "acceptable")."
That parameter is identified in the User Guide and Concepts help text available:
"You'll want to consider only companies whose predictability measures more than 8.5 (the rating will be shown in a yellow frame) and those whose predictability rates better than 9.5 are most desirable (a green frame)."
It is still unclear imo in regard to the text displayed on the growth drill-down and the summary, as you note:
"I don't think "unpredictable" and "reasonably stable and predictable" are equivalent."
Which we'll work on clarifying and run the changes by this forum topic before implementation.
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Rank: Advanced Member
Posts: 126
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Hi Jim,
This issue has been resolved, the text on the growth page and the summary page are now consistent. Please let us know if you note any other issues or think that this issue is not resolved correctly. Thanks!
Dave
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