Value Analysis Scorecard
for use with "Fire Your Stock Analyst" by Harry Domash
published by Financial Times Prentice Hall

Company____________________

Date__________________

Step 1) Analystsí Ratings & Forecasts

Sentiment Index _____

Add one point if the Sentiment Index score is minus 4 or below. Subtract one point if the SI score is greater than 2.

Earnings Growth _____

Subtract one point if the forecast year-over-year earnings growth exceeds 4%

Earnings Forecast Trend _____

Subtract one point if the EPS forecasts increased two cents or more during the last 90 days.

Step 2) Valuation

Implied Growth _____

Add one point if the implied growth is less than 5%. Subtract one point if the implied growth exceeds 10%.

Step 3) Target Price

Current price vs. target buy price _____

Add one point if the current price is below the low target buy price. Subtract one point if the current price exceeds the high target buy price

Step 4) Industry Analysis

Industry Growth _____

Add one point if the industry sales growth rate exceeds 15% Subtract one point if the industry growth rate is less than 3%

Industry Concentration _____

Add one point if the industry has less than four major competitors

Step 5) Business Plan

Business Plan Score _____

Record business plan score

 

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Step 6) Management Quality

Key Executive & Board Quality _____

Add one point if you rated the Key Executive & Board Quality very good or excellent

Clean Accounting/EPS Growth Stability _____

Subtract one point if the non-recurring charges percentage of sales averaged 3% or more over the past five years, or if you judged the earnings growth stability as poor.

Stock Ownership (not included in score) 

Step 7) Financial Health

Financial health is a pass or fail test. Disqualify candidates that fail the appropriate test.

Step 8) Profitability

Normalized Return on Assets _____

Normalized return on assets is the ROA that you expect the firm to achieve in its recovery year. Add one point if the normalized ROA exceeds 14%. Subtract one point if the normalized ROA is less than 6%

Step 9) Red Flags

Historical Capital Exp. vs. Depreciation _____

Subtract one point if recent annual deprecation charges generally exceeded capital expenditures in the same year.

Step 10) Ownership

Total Insider Ownership _____

Subtract one point if insider ownership exceeds 55% of shares outstanding

Step 11) Price Chart

Share Price vs. Moving Average _____

Subtract one point if the share price is more than 10% above its 200-day MA

 

Total Score _____