Columns AL – AN – Analyst Consensus
Cameron : Column AL asks whether or not it is a Star Stock on Stock Doctor. It gets a one for yes, a zero for no. And a Star Stock is basically a health rating from Stock Doctor?
Tony : Correct.
Cameron : And you can tell if it’s a Star Stock, because when you go to the first page for that company on the Stock Doctor, if it is a Star Stock, it’ll have stars beside its name.
Tony : Yeah. And they use three stars. So we need to be careful here. If it’s a Star Stock, it gets a one, but they also have a green star, which is called a Borderline Star Growth Stock. That’s a stock which is almost a Star Stock. And they have a purple star, which is what they call a Star Income Stock. It’s a stock which pays a good yield and it’s also has a good quality score. So I give Star Growth Stocks a score of one and 0.5 if they’re Borderline or Star Income Stocks.
Cameron : Right. So, Borderline gets a 0.5.
Tony : Yeah. So, I’ve got BHP open in front of me at the moment. It’s a Borderline plus a Star Income Stock. So, we would score it 0.5 plus 0.5, so one in total.
Cameron : Okay. So we’re taking advantage of the fact that there are analysts at Stock Doctor that have delved down deeply into the financials and the prognostications. They’ve gone beyond the proctology exam. They’ve put it in an MRI machine. They’ve done ultrasounds and they’re giving it a rating. So we’ll use that and whack it into our calculations.
Tony : Yeah. And it’s not just the financial health of the company, it’s a few other metrics that they put into their checklist before they give stocks a Star Stock, or a Borderline Stock rating.
Cameron : But then in column AM, we look at the consensus value for the share, and then in column AN we ask if the current share price is beneath the consensus value. This is looking at the view of the analsyts who are covering the stock. What they think the intrinsic value of the stock is. Stock Doctor sometimes has a number for this. If people don’t have Stock Doctor, they can check Yahoo Finance. Sometimes there is no number, and you’ve often said that’s a good thing for us, because it means analysts aren’t covering it yet, so we might be getting in early.
It gets a one for a yes. Zero for a no. But if the previous cell was blank because we don’t have an IV, then we leave this one blank as well. Then we get to the column AO which asks is the financial health from Stock Doctor stable or increasing? We get this on the financial health box on the home page, the nine rules page, Tony?
Tony : Yeah. So, on the nine rules page, in the top left hand of the page, you’ll see a series of bar charts.
Cameron : And how do we tell if it’s stable or increasing?
Tony : The bar chart shows its financial health rating for the last ten reporting periods (ie ten x six months). We can tell from those if the financial health is stable, increasing or deteriorating.
Cameron : And we give it a score of two if it’s increasing; a one for stable; minus one for deteriorating; and anything else is zero.
Tony : Yes. And we’re just looking at the last two reports.