Distribution of Ratings
Intrinsic Value Stock Screener
What we have here is a unique stock screening tool. Its main distinguishing feature is the use of stock's intrinsic value for stock screening. This stock screener is most appropriate for long-term value investors. There is no guarantee, of course, that a stock will ever reach its intrinsic value, but there is a strong market evidence showing that stocks undervalued or overvalued on the fundamental basis tend to, respectively, outperform or underperform the market as a whole.
March 28, 2013
We've just completed a major refocus and redesign of the site. iStockResearch now is all about calculating intrinsic value of common stocks. It provides an indispensable tool in the form of an on-line financial model for estimating fundamental value of companies and their shares. iStockResearch offers the most sophisticated and theoretically-sound financial modeling for value of stock.
We've analyzed one- and two-year performance of stocks with different ratings. The results confirm validity of the valuation model we use. In a sufficiently large group of stocks (chosen randomly or as constituents of a major index) stocks rated as “buy” or “strong buy” as a group (as if they were part of an equally-weighted portfolio) consistently outperformed by a very large margin (about 15% during a two-year period) stocks in the “hold” category. Stocks rated “hold” outperformed the ones rated “sell” and “strong sell”, but the outperformance, though substantial and consistent, was not as large (several percentage points over the 2-year period). And this is without any adjustment to the model's input data, which is currently taken directly from the company's financial statements without any alterations.
We have no doubts in the merits of the financial model we use for estimating intrinsic value of stocks. It is a great tool, especially for preliminary stock screening purposes, when out of the large universe of stocks you need to select a few you want to analyze further. We always strive to make the site better and would greatly appreciate any comments or suggestions you might have.