- First, the historical performance, which looks at the company’s historical financials over the past 10 years, where discounts are given for poor performance and inconsistency.
- Second, the profitability, which examines profitability ratios such as return on equity, return on assets and margins.
- Third, the yields, which compares the company’s fundamental yields against the riskfree rate, along with its relative valuation to peers.
- Fourth, financial safety, which examines the company’s balance sheet, comprising liquidity and solvency ratios, the quality of its shareholder equity and any external credit rating on the company.
- Fifth, sentiment, looks at analyst ratings and forward price ratios of the company.
- Last, the price-to-value ratio, which compares the price growth to the weighted value growth over multiple periods. This weighted value includes revenue, net income and cash flows in ascending order.
For this week’s issue, The Edge Singapore has compiled a scoring table for globally-listed and investible stocks along the defence value chain, based purely on quantitative metrics.
The scoring table is purely quantitative and evaluates the following six aspects of the company:
