Rank: Advanced Member
Posts: 47
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Hi guys,
I attended the webinar for the TK6 new features, and during that event, Doug reviewed the automatic judgment feature. However, he didn't go into much detail about where those judgments came from. I really REALLY like the feature! But I would like to have a better understading of where they come from.
Can I assume they are the same judgments used for Take Stock? If so, that's OK by me. How is the sales figured? I see that EPS are automatically capped at the sales growth rate which is fine.
Doug said in the webinar that the P/Es are based on a complex calculation that cannot be recreated by hand. That's OK, too. But surely there's a basis for the calculations. Can you explain that to me?
Also, how is the low price determined? Not the actual calculation, but the theory behind the calculation. So for example, I see one of my stocks has a low price lowered than the 52-week low (probably a BUNCH of my stocks!). Is that based on a %? Or something else? And what triggers the program to calculate a different low price?
I really appreciate the work you guys are doing!
Lynn O.
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The "default judgment" in Toolkit 6 is similar but not exactly the same as in Take Stock. Here is a plain English description of the selections that Toolkit 6 makes.
Sales and EPS growth are projected at the lower of the last 9-year or last 1-year historical rates; EPS is never projected to grow faster than sales.
The projected high P/E ratio considers the average high P/E Ratios of the last five years on a weighted basis eliminating the highest high P/E Ratio, and is capped at 30.
The projected low P/E ratio considers the average low P/E Ratios of the last five years on a weighted basis eliminating the highest low P/E ratio, and is capped at 20.
The projected low price is by default the projected low P/E ratio times TTM EPS, but will never be higher than 80% of the current price.
Doug
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