Welcome back!
Now let's start looking a some data. You will recall that our major focus is to look at the Take Stock Quality Index for the three sources of data -- BI OPS/SDS, StockCentral Hemscott, and AAII Reuters. All of the data analysis used data as of August 31, 2007, and the analysis was conducted in September, 2007.
Two attachments to this message, ORLY.pdf and JOSB.pdf who summary reports that show a graph that is similar to the growth chart on Take Stock's Technamental Worksheet (or the Visual Analyis graph in Toolkit) and a table of data that is fundamental to the analysis process. There are three graphs, one for each data source. Each "row" in the table shows the numbers reported by or calculated from each data source.
Now take a look at the ORLY.pdf file. Note that the analysis based on OPS/SDS gives ORLY a Quality Index of 5.3, while the analyses based on the StockCentral Hemscott and AAII Reuters data give an index of only 2.6. The difference is related to a difference in the EPS number fo 2005. In this case, OPS (correctly) has adjusted the EPS for a non-recurring charge, while this adjustment has not been made in the other two data sources. Here, OPS/SDS is the winner, and this also shows how a relatively small change (6 cents per share) to an important number can have a large impact on the outcome.
Another example is shown in the JOSB.pdf file. Here, the AAII Reuters based analysis is quite at variance with the other two results. There problem here is with the quarterly numbers for sales and EPS. For the July 2005 quarter, the data in the Reuters data is a six-months value, not a quarterly value. This results in a much lower estimate of the trailing twelve month sales and earnings growth rates, and therefore a much lower quality rating.
These two examples illustrate just two examples of how differences in data (one a transcription error and one an analysis error) can have a great impact on the resulting analysis of Quality. And, Quality is the major item that we consider!
Analyses like those shown for ORLY and JOSB were also conducted for all of the companies that passed the minimum requirement for quality with either the desktop version of Take Stock using BI/SDS data or the online version of Take Stock as shown in the StockCentral Stock Screener using StockCentral Hemscott data. The StockCentral Stock Screener can easily produce the list of all "acceptable" companies based on the Take Stock Quality Index. This produced a list of 179 companies.
Tomorrow we will summarize the results of the study. |