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theprofits2  
#1 Posted : Thursday, February 3, 2011 10:19:39 AM(UTC)
theprofits2

Rank: Newbie

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I am looking for the definition and explanation of the #5 Sales Growth R2 and #6 EPS Growth R2 on page 1 of the SSG.

 

Thanks,

Terry

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gerlach  
#2 Posted : Tuesday, February 15, 2011 11:07:03 AM(UTC)
gerlach

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 In the Toolkit 6 manual (p. 97 in the 6.2 edition), it states:

 
Along the bottom of the Stock Study form are the year labels and six data fields representing historical sales growth, historical earnings growth, estimated (future) sales growth, estimated (future) earnings growth, and the R2 values for sales and EPS growth. 
 
R^2 (R2 or R-squared) is an indicator of how well the historical data conforms to the trend line that is calculated by the program. Toolkit uses the "least squares" to find the trend line that lies closest to all of the plotted points. The R-squared value measures how closely the plotted points are to the trend line, and ranges in value from 0 to 1. The closer the number is to 1 the better, with 1 representing perfect correlation and 0 representing no correlation.
 
Thus, the closer the R-squared value is to a perfect 1.0, the straighter the line is formed by the points on the graph, or, in other words, the more consistent the growth of the company has been in the past. R-squared is useful when searching for stocks, since you can restrict your search for companies that have a high level of consistency with respect to their historical growth.

Doug

 

ArnieS  
#3 Posted : Sunday, November 20, 2011 9:02:08 PM(UTC)
ArnieS

Rank: Newbie

Posts: 2

Has R2 been permanently deleted from the TSSW and SSG in the online version of Take Stock? I can no longer find the value on the Stock Central site. Any reason?
Arnie
gerlach  
#4 Posted : Monday, November 21, 2011 2:14:12 AM(UTC)
gerlach

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It's still there, where it has always been. Look on page 1 of the TSSW on the right below the 10-year data table at the top, in the Growth Stat % table. The first row is Stability, which is the R2 value.

Doug
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