We believe that many investors have an imperfect understanding of where alpha comes from.
Most think in terms of picking winners
when we believe their goal should be to avoid losers.
A loser is a company that cannot deliver the revenue growth indicated by its stock price.
Important Disclosure
The snapshot is being provided for illustrative purposes only and should not be construed as providing investment advice or as a recommendation to buy or sell any particular security. This snapshot is taken at a particular point in time and any analysis or information contained in it is outdated and should not be relied upon. Past performance is not an indication or a guarantee of future results. For full disclosure click here.
1
2
3
4
has a range of potential revenue growth possibilities. To determine this range, we take ’s revenue growth from the past 12 quarters and conduct 10,000 statistical simulations.
This process generates a mean revenue growth rate and a range of revenue growth possibilities for from most to least likely.
We believe ’s stock price indicates revenue growth in the future.
We use the stock price together with widely accepted valuation methodologies to calculate ’s indicated revenue growth.
We believe a losing stock is one where the company is unable to deliver revenue growth indicated by its stock price.
To Identify if is a losing stock, we calculate the probability that indicated revenue growth is within the range of revenue growth possibilities.
There is a probability will fail to deliver the growth implied by its stock price.
In our process a lower h-factor is better.
The h-factor is the probability the company will fail to deliver the growth indicated by its stock price.
The risk is caused by humans impounding vague and ambiguous information into stock prices in a systematically incorrect way.
high h-factor
low h-factor
© 2024 New Age Alpha LLC. All Rights Reserved. CC: NAA10183D | SKU: 10234
We use cookies to enhance your experience on our site. By carrying on browsing this site, you give consent for cookies to be used. For more details, read our Privacy Policy.
The website you are accessing is created and maintained by another entity. We make no representation or warranty with respect to the information contained on the site or that it is appropriate in all jurisdictions or countries, or for use by all investors or counterparties. The products and services discussed at this site may not be appropriate for sale or use by all investors or counterparties. By providing this link, we are not providing you with investment advice or offering securities for sale to you. All persons and entities that access this site do so on their own initiative and are responsible for compliance with applicable local laws and regulations.
The website you are accessing is created and maintained by another entity. We make no representation or warranty with respect to the information contained on the site or that it is appropriate in all jurisdictions or countries, or for use by all investors or counterparties. By providing this link, we are not providing you with investment advice or offering securities for sale to you.
