What investors need is data that is not only reliable but completely 100% up to date. Companies report their full results once per year at which point most vendors of fundamental information update their data sets. Due to the rigour of accounting and auditing results these numbers are often not released for three or four months after the actual year end.
This can mean that the data that financial websites and desktop software products use for creating key financial ratios can be up to 15 months old.
Why this matters
How can any sensible investor make wise investment decisions based on 15 month old data? If you want to know the P/E ratio, EPS Growth rate or Return on Equity of a stock, you need to know that the numbers are as up to date as possible. If a company has fallen on hard times during the interim or quarterly reporting period the ratios should reflect that. If the company’s debt levels have soared or financial health deteriorated according to key ratios like the Altman Z-Score you really need to know and act on it quickly. Game Group was a classic example where the interim accounts highlighted a severe risk of bankruptcy which was less apparent at the year end accounts. If you’d incorporated the interim data into your analysis you’d have been much safer.
What we've done
We decided to tackle this problem head on in the latest update to Stockopedia’s Premium services by upgrading all our key fundamental ratios to include any quarterly or interim data that has been reported. Ratios built on such a data set are known as ‘TTM’ (trailiing twelve month) ratios in the industry and have for the most part been very unavailable on websites. Some websites do quote a few TTM ratios but never to the extent that we are making them available.
Literally our entire codebase has been rewritten to enable TTM calculations across not only all financial statements, but also across all our scoring systems (F-Score, Z-Score, M-Score), rankings and our growing library of the best stock screening strategies on the web. We are incredibly excited about these upgrades as not only do we know the impact this can have on investment returns but we also know there's nobody else in the UK or possibly the web with a data set that is this current for finding investment opportunities.
If you’d like to know more about how we’ve calculated TTM data - please see this technical article here.
While we're at it...
After numerous requests, we've added the ability to 'fork' Guru screens and tweak the criteria we've used to suit your own interpretation or perspective:
Other upgrades to the site include…
- The ability to edit and create your own table column views in screens
- The ability to use ranks and medians across almost all of our screenable ratios
- Screening across ratios is now TTM as default - Piotroski, Altman, Magic Formula indicators are now all based on TTM data
- We are also about to unleash the Montier C-Score and Mohanram G-Score - more on that later…
I know that I'm biased but I do think this is phenomenal stuff for investors that care about financial data. We know that there are so many in the institutional sector of the market who don't have a data set as cutting edge as us. And we're developing rapidly so we welcome feeback! If you haven't had a look at what we can offer yet please do take a free 2 week trial !Follow edcroft on Twitter
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