| gRANK revisited ... and other assorted ratios |
Some time ago (December, 2003) I talked about some interesting ratios which I hoped would do a better job in
identifying a "good" stock.
(See gRANK stuff.)
>Better than what?
Better than something simple like P/E Ratio of PEG Ratio or ...
>So?
So, at that time I considered P/E and PEG and, in particular, things like:
|
M/E Ratio = EV / EBITDA years
gPEG = PEG(stock) / PEG(index) gNUM = PEG * Volatility2 gRANK = M/E * Volatility2 / (Earnings Growth Rate) |
As you'll recall, I considered the DOW 30 stocks and this is what I got
... with some ?? where I couldn't find the data 
| Stock | P/E | PEG | M/E | 1000gPEG | gNUM | gRANK | Stock | P/E | PEG | M/E | 1000gPEG | gNUM | gRANK | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GE | 20.9 | 1.9 | 24.1 | 5.6 | 1380 | 5607 | MSFT | 28.6 | 2.2 | 17.4 | 6.7 | 5084 | 1443| WMT | 27.3 | 1.7 | 14.3 | 5.2 | 1374 | 562 |
| C | 15.9 | 1.2 | ?? | 3.5 | 886 | ?? | XOM | 13.6 | 1.9 | 6.5 | 5.7 | 488 | -66 |
| INTC | 50.2 | 2.7 | 30.7 | 8.3 | 12096 | 962 | IBM | 23.4 | 2.1 | 13.4 | 6.4 | 2808 | -331 |
| JNJ | 21.9 | 1.4 | 12.2 | 4.4 | 793 | 410 | PG | 24.8 | 2.0 | 14.0 | 6.1 | 2163 | 789 |
| KO | 26.7 | 2.4 | 18.7 | 7.3 | 1540 | -520 | MO | 12.0 | 1.3 | 8.2 | 3.8 | 1603 | 351 |
| MRK | 14.0 | 2.0 | 9.4 | 6.0 | 1716 | -4566 | HD | 20.6 | 1.4 | 12.9 | 4.2 | 2042 | 935 |
| SBC | 10.4 | 7.5 | 5.8 | 22.8 | 8983 | -316 | JPM | 16.6 | 1.2 | ?? | 3.5 | 2132 | ?? |
| HPQ | 27.2 | 1.5 | 17.2 | 4.4 | 4778 | -175 | MMM | 28.0 | 2.2 | 14.6 | 6.6 | 930 | 164 |
| AXP | 20.5 | 1.5 | 15.6 | 4.6 | 1308 | 129 | DIS | 35.0 | 1.8 | 24.1 | 5.3 | 2120 | ?? |
| DD | 60.3 | 3.0 | 20.4 | 9.1 | 2071 | -112 | UTX | 19.2 | 1.8 | 10.0 | 5.6 | 2243 | 794 |
| MCD | 32.6 | 2.2 | 12.6 | 6.8 | 2398 | -296 | BA | 183.3 | 4.0 | 17.7 | 12.2 | 6596 | -353 |
| AA | 32.2 | 2.0 | 12.0 | 6.2 | 3326 | -365 | CAT | 25.0 | 2.3 | 15.3 | 6.8 | 2626 | -19847 |
| HON | N/A | 1.9 | -201.7 | 5.8 | 5495 | ?? | GM | 6.4 | 1.4 | 19.9 | 4.1 | 2042 | 159 |
| IP | 139.7 | 7.1 | 13.3 | 21.5 | 7316 | ?? | T | 17.7 | -0.5 | 3.5 | -1.5 | -2026 | -54 |
| EK | 19.1 | 2.3 | 6.4 | 6.9 | 4704 | 14 | |
Then I picked out the "best" according to each Dec, 2003 criterion, like so:
| Rating | P/E | PEG | M/E | gPEG | gNUM | gRANK |
| Best | GM | C | T | C | XOM | EK |
>And you said you'd look again in a few months, right?
Right. So now it's October, 2004 and I find the following percentage changes in the stock prices ... from Dec/03 to Oct/04 ... bestest to worstest:
| EK = 44.9% | BA = 32.0% | XOM = 31.6% | HD = 18.8% | HON = 17.8% | AXP = 17.4% | GE = 14.2% | JPM = 14.0% | JNJ = 11.3% | DIS = 10.4% |
| SBC = 9.7% | MCD = 9.3% | MSFT = 5.9% | CAT = 5.3% | UTX = 4.7% | WMT = 1.1% | AA = 1.0% | IP = 0.4% | DD = -0.8% | MMM = -1.6% |
| IBM = -4.7% | C = -5.5% | MO = -10.4% | HPQ = -13.5% | GM = -14.2% | KO = -16.7% | T = -24.3% | MRK = -28.2% | INTC = -30.2% | PG = -44.6% |
Or, for the stocks which had the "best" parameters in Dec/03:
| Rating | P/E | PEG | M/E | gPEG | gNUM | gRANK |
| Best | GM | C | T | C | XOM | EK |
| Gain | -14.2% | -5.5% | -24.3% | -5.5% | 31.6% | 44.9% |
>Whooeee! So you made a bundle on Eastman Kodak, eh?
Uh, no. I don't really believe in this stuff, do you?
>But that gRANK is pretty good, eh?
Yeah, and gNUM ain't bad either. But do you think that's some kind of proof
that these Ratios are good indicators of future prices?
>You bet I do! Do you know anything better?
Yes. Click here 
>Yeah, very funny ... but what about now? What's "best" now?
Okay, for October, 2004, here's what I get:
| Stock | P/E | PEG | M/E | 1000gPEG | gNUM | gRANK | Stock | P/E | PEG | M/E | 1000gPEG | gNUM | gRANK | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GE | 21.9 | 2.2 | 25.0 | 48.2 | 1604 | 2965 | MSFT | 37.3 | 1.8 | 24.0 | 40.8 | 4168 | -3005| WMT | 23.8 | 1.4 | 12.4 | 31.6 | 1133 | 794 |
| C | 14.7 | 0.9 | ?? | 20.8 | 716 | ?? | XOM | 15.3 | 1.7 | 7.4 | 38.3 | 441 | 22 |
| INTC | 18.6 | 1.3 | 11.6 | 28.5 | 5627 | 637 | IBM | 18.6 | 1.8 | 10.4 | 39.4 | 2331 | 123 |
| JNJ | 18.7 | 1.4 | 10.8 | 31.8 | 782 | 654 | PG | 23.0 | 1.8 | 13.2 | 39.9 | 1925 | 570 |
| KO | 20.2 | 2.0 | 14.8 | 45.3 | 1301 | 224 | MO | 10.1 | 1.1 | 7.4 | 24.4 | 1387 | -553 |
| MRK | 10.2 | 3.4 | 7.1 | 76.8 | 2987 | -1366 | HD | 18.5 | 1.2 | 9.6 | 26.9 | 1775 | 809 |
| SBC | 17.0 | 2.8 | 7.0 | 63.6 | 3401 | 165 | JPM | 17.2 | 1.1 | ?? | 24.6 | 2039 | ?? |
| HPQ | 17.4 | 1.5 | 10.8 | 32.5 | 4745 | ?? | MMM | 22.8 | 1.8 | 11.9 | 39.4 | 751 | 233 |
| AXP | 20.6 | 1.5 | 18.7 | 32.7 | 1249 | 1354 | DIS | 23.1 | 1.7 | 14.5 | 37.2 | 2000 | 6982 |
| DD | 47.7 | 2.0 | 55.2 | 43.9 | 1357 | ?? | UTX | 17.7 | 1.7 | 9.8 | 37.6 | 2048 | 2131 |
| MCD | 20.1 | 2.0 | 10.0 | 43.9 | 2098 | 165 | BA | 15.9 | 1.8 | 12.5 | 39.4 | 2902 | 450 |
| AA | 21.0 | 1.7 | 9.5 | 38.8 | 2821 | -288 | CAT | 18.5 | 1.3 | 13.4 | 28.7 | 1494 | 414 |
| HON | 22.0 | 1.7 | 12.3 | 38.3 | 4945 | ?? | GM | N/A | 1.2 | ?? | 26.4 | 1785 | ?? |
| IP | 57.2 | 5.2 | 11.5 | 117.4 | 5407 | ?? | T | 10.0 | -0.9 | 2.9 | -19.7 | -3638 | ?? |
| EK | 33.7 | 2.7 | 10.3 | 60.9 | 5612 | -323 | |
Note how EK has dropped out of the picture
Okay, so the "best" (as of October, 2004) is then:
| Rating | P/E | PEG | M/E | gPEG | gNUM | gRANK |
| Best | T | C | T | C | XOM | XOM |
>So buy XOM, right? It's best on two counts!
Exxon Mobil Corp? Sure, buy some ... then come back in a few months to tell me if you done good !
See also gRANK revisited ... again
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