Please, be aware that Stock Analyzer can give you quite a different results for some companies!
Most important change happened in the
Growth Rate section. As you know we used to ignore negative values from
Growth Rate calculations. It means if the value in the "Raw Data" is negative we could not proper calculate Growth
Rate and ignored it. Basically, if the value was negative, the corresponding cell in the Growth Rate table was empty
and it did not reflect in the result column, where we show good/fair/bad estimates.
From now on if the value in the "Raw Financial Data" cell is negative we put 0 in to the corresponding Growth Rate cell and
Result value for this column/row will be "bad".
Sticker Price calculations. It was a lot of questions about "pessimistic/optimistic" approach of
the Stock Analyzer Calculations. We compile a lot of suggestions, did a lot of tests and come up to the following changes.
Instead of taking minimum between 5 and 10 year Equity Growth Rate as
Estimated EPS Growth Rate, from now on we
take
average for all available historical Equity Growth Rates. Sounds like the result is much better and much more
reliable. Plus, for each calculation you can find a detail explanation in the footer of the "Sticker Price" section.
Last, but very important improvement - we added
Debt/Free Cash Flow Ratio to the Stock Analyzer. This small but
important piece of analysis was missing and you had to go to "Raw Data" section and make sure that Long Term Debt is not
to big. Now you can see the Debt/Free Cash Flow Ratio which reflects
The
Rule on Debt by Phil Town.