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Database
Shortly
after 2 P.M. EST every Friday, Value Line transmits to
OptimumPortfolio.com (OP), electronically, an up-to-date set of
the data published in the Value Line Investment Survey
covering 1700 stocks in 98 industries. The OP database is
thereby automatically updated.
For
a stock to be included as a candidate for the user's portfolio, the
OP system requires that twenty-two particular measurements be
made based on Value Line data. For various reasons, one or
more of the data for these measurements for a particular stock
may be temporarily unavailable. Our policy is to exclude
such stocks until such time as firm data does become
available. Currently, up to 20 percent of the 1700 stocks
fall into this category at any one time.
Stock
prices are automatically updated daily as soon as possible after
the close of business of the New York Stock Exchange.
Value Line "Safety" Rank
Value Line’s
measurement of the potential risk associated with an individual
common stock. The Safety Rank is computed by averaging two Value
Line statistical indexes – the Price Stability Index and the
Financial strength Rating. Safety Ranks range from 1 (Highest) to
5 (Lowest). We measure a user's risk tolerance by the
proportionate amounts of investment he states he is willing to
risk on Value Line safety ranks 1-5 on his Risk
requirements and on the relative weight he attaches to safety on
his Criteria Selection and Weighting requirements.
Cash
Income Return
Annual stock
dividends plus interest on money market funds.
Price
Earnings Ratio
Price of a stock
at close of business on the New York and NASDAQ Exchanges divided
by forecast earnings per share next year.
Return
on Common Equity
Earnings as a
percentage of common equity.
Value
Line "Timeliness™" Rank
Value Line’s
rank of a stock’s probable relative market performance in 6 to
12 months ahead. It is derived by a computer program using as
input the long-term price and earnings history, recent price and
earnings momentum, and earnings surprise. All data are known and
actual. Stocks ranked 1 (Highest) and 2 (Above Average) are likely
to outpace the market. Those ranked 4 (Below Average) and 5
)Lowest) are not expected to outperform most stocks over the next
6 to 12 months. Stocks ranked 3 (Average) will probably advance or
decline with the market in the next 6 to 12 months.
Value
Line "Price Growth Persistence" Rating
A statistical
measure of the tendency of a stock to show persistent growth
compared with the average stock, expressed as an index ranging
from 100 (Highest) to 5 (Lowest) in increments of 5. Stocks
for which Value Line has not yet been able to establish a
meaningful figure are conservatively set at the lowest value of
5.
Value
Line "Earnings Predictability" Rating
A measure of the
reliability of an earnings forecast. Predictability is based upon
the stability of year-to-year comparisons, with recent years being
weighted more heavily than earlier ones. Earnings forecasts with
the highest rating (100) tend to be the most reliable, the lowest
(5) the least reliable. The earnings predictability is derived
from the standard deviation of percentage changes in quarterly
earnings over an eight year period, with adjustments for changes
around zero and from plus to minus. Stocks for which Value
Line has not yet been able to establish a meaningful figure are
conservatively set at the lowest value of 5.
Sales
Sales are defined
as total sales revenue less returns, allowances and sales
discounts; also known as net sales. The estimated percentage
increase in sales next 12 months is the percentage increase in the
estimated next fiscal year sales over the current fiscal year
sales.
Earnings
per Share
All earnings per
share are defined as primary earnings per share after the
deduction of discounted, non-recurring and extraordinary items.
They are intended to measure the core annual dollars per share
earning power of the company.
In order to avoid
any distortions due to seasonal variation in earnings we deal only
in earnings over a full year period. All periods used to measure
increases in sales and earnings per share moved ahead one quarter
every 13 weeks.
Increases
in Annual Earnings per Share
Increase in
earnings per share Past 12 months and Next 12 months are increases
between consecutive 12 month periods.
Earnings
per Share Last 12 Months
At
present, we conservatively follow a policy of excluding from
consideration any company which operated at a loss in the last
twelve months. Of course, it will be included when these
earnings per share become positive.
Earnings
per Share Next 12 Months
Earnings
per share next 12 months at any time are the sum of the
estimated earnings per share in the next four quarters. Value Line forecasts
are changed weekly as information on probable company performance
becomes available.
Increase
in Earnings per Share
To ensure
comparability between companies, the periods of time used to
measure increases in earnings per share are, as far as possible,
the same for all
companies. The forecast fiscal year earnings per share 3-5 years
ahead is used to gauge the increase in earnings per share between
the next 12 Months and 3-5 years ahead. |
