LONG IDEAS: Profile 1 – Earnings Growth (EG1 + EG2)
- Positive (above Sector Average), More Positive (earnings growth Momentum) – Ideal Scenario
- Positive (above Sector Average), Positive (same)
- Positive (above Sector average), Less Positive (above sector average)
- Positive (at Sector average) = Opportunity cost to simply own the sector
- Positive (below Sector Average), Positive (at or above sector average) — Could be worth looking at Vs Sector Positive (below Sector average), Positive (below sector average) — Opportunity cost to simply own the sector.
- Negative (below sector average), Positive (below sector average), – Opportunity cost to simply owning the sector.
- Negative (below sector average), Positive (at sector average) — Worth looking at (turnaround story)
- Negative — Loss Making (below sector average), Positive (above sector average) — definitely worth looking at (turnaround story).
- Negative (below sector average), negative (below sector average) — not worth looking at all. Could provide a good hedge to a high-quality long idea in same sector. Have to decide which is a better hedge i.e. this stock or the sector Of the market.
- Hedges to longs — Market, Sector, Negative (negative) Of Negative (below average), Of classic shorts (low correlation from intra sector)
Fundamental Ratios
| Sigla | Designação |
|---|---|
| PEG2 | Earnings growth 2022 (next year) = PE2/EG2 |
| PEG1 | Earnings growth 2021 (current year) = PE1/EG1 |
| PE2 | PE forward 2022 (next year) |
| PE1 | PE forward 2021 (current year - Price/EPS) |
| PE0 | Price/EPS (last 12 months) |
| EPS2 | Next year EPS (2022) |
| EPS1 | Current year EPS (2021) |
| EPS0 | Last year EPS (2020) |
| EG2 | Earnings growth 2022 (next year) = (EPS2-EPS1)/EPS1 |
| EG1 | Earnings growth 2021 (current year) = (EPS1-EPS0)/EPS0 |
| Sigla | Designação |