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ACE'S Stock Grade (ASG) - a proprietary stock grading system
devised by Ace's Stocks Aces to encapsulate in one number the
investment qualities of a stock. Generally, the higher the ASG value, the better
expected performance of the rated stock.
Significance of ASG values:
60.00 plus ASG
(Excellent); 50.00 - 59.99 ASG (Very Good); 40.00 - 49.99 ASG ( Good); 30.00 -
39.99 ASG (Average); 20.00 - 29.99 ASG ( Poor); Less than 20.00 ASG (Very
Poor).
ADR (American Depository Receipt) - enables an investor to buy shares
in a foreign company that is traded in a U.S. exchange. It is a negotiable
certificate issued by a U.S. bank which represents a specified number of shares
(or one share) in a foreign stock. ADRs are denominated in U.S. dollars, with
the underlying security held by a U.S. financial institution overseas. ADRs help
to reduce administration and duty costs that would otherwise be levied on each
transaction.
ADRs have currency and economic risks for the underlying shares in another
country.
Alpha stock, ACE'S - a stock that is classified as among the
best of ACE'S picks based on the following
the criteria;
high ASGs, demonstrated
long-term price stability, demonstrated long-term price growth, companies that
are at least 3-5 years old, and companies that are in
industries with strong price performance
Cash Flow - is basically the amount of cash a company generates in
the course of running its business during a specific period. It is defined as revenues less all operating
expenses, but calculated through a series of adjustments to net income.
Cash flow is crucial to the operation and survival of companies. A company
having ample ready cash ensures that
creditors, employees, and others can be paid on time.
Cash Flow, Free - Operating cash flow less deductions for capital
expenditures and dividends. Free cash flow is the amount of cash that a company
has left over after it has paid all of its expenses, including investments.
Negative free cash flow is not necessarily an indication that a company is not
doing well. Note that some young companies apply their cash into investments,
which diminishes their free cash flow. Free cash flow is considered by
some experts to be a better indicator, than earnings, of a company's financial
health.
Debt/EquityRatio
- is calculated by dividing a company's long-term debt by its shareholders
equity (i.e., the amount of funds contributed by stockholders plus the retained
earnings or losses). A higher debt/equity
ratio generally means that a company has been aggressive in financing its growth
with debt. This higher ratio can result
in volatile or negative earnings as a result of the additional interest expense.
Thus, the Debt/Equity Ratio is popularly used
as a measure of a company's financial health.
EMA - Exponential Moving Average. A type of moving
average that gives more weight to the latest data. A 13-day EMA is the average,
for example, of a stock's 13 consecutive days closing prices. A
50-day EMA is the average, for example, of a stock's 50 consecutive days closing
prices. An EMA gives an indication on how much a stock's current price is
over or under a particular referential EMA. Thus, an EMA could be used as the basis for determining
the short term statistically-based buy points for a particular stock.
Equity - Another name for a stock. When used in relations to a
balance sheet, it pertains to the
amount of funds contributed by the
owners (the stockholders) plus the retained earnings (or losses). In general,
equity can be thought of as ownership in any asset after all debts associated
with that asset are paid off.
Gross Margin - is a variant of profit margin. It is defined as Gross
Income divided by Net Sales.
Growth Stock - stocks of companies that are expected to have
increased earnings at a rate higher than These stocks are often
priced above or at fair value.
Industry Group - is used to describe a basic category of business
activity in the stock market. For example, the semiconductors, consumer durables, biotechnology,
telecom services, etc. industries.
Investment - in
general terms, investment means the use money to purchase a product or other
item of value with the expectation of making more money.
Investment Adviser - as
defined by Section 202 of the Investment Advisers Act of 1940, " any person who,
for compensation, engages in the business of advising others, either directly or
through publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or who, for
compensation and as part of a regular business, issues or promulgates analyses
or reports concerning securities; but does not include (A) a bank, or any bank
holding company as defined in the Bank Holding Company Act of 1956, which is not
an investment company, except that the term "investment adviser" includes any
bank or bank holding company to the extent that such bank or bank holding
company serves or acts as an investment adviser to a registered investment
company, but if, in the case of a bank, such services or actions are performed
through a separately identifiable department or division, the department or
division, and not the bank itself, shall be deemed to be the investment adviser;
(B) any lawyer, accountant, engineer, or teacher whose performance of such
services is solely incidental to the practice of his profession; (C) any broker
or dealer whose performance of such services is solely incidental to the conduct
of his business as a broker or dealer and who receives no special compensation
therefore; (D) the publisher of any bona fide newspaper, news magazine or
business or financial publication of general and regular circulation; (E) any
person whose advice, analyses, or reports relate to no securities other than
securities which are direct obligations of or obligations guaranteed as to
principal or interest by the United States, or securities issued or guaranteed
by corporations in which the United States has a direct or indirect interest
which shall have been designated by the Secretary of the Treasury, pursuant to
section 3(a)(12) of the Securities Exchange Act of 1934, as exempted securities
for the purposes of that Act; or (F) such other persons not within the intent of
this paragraph, as the Commission may designate by rules and regulations or order".
Market Capitalization (Market Cap) - is calculated by
multiplying the number of its outstanding shares by the shares' current market
price. Market cap measures a company's
size. The market cap also provides a broad gauge
of the growth-versus-risk potential of a company. Historically, large caps have
experienced slower growth with lower
risk; whereas small caps have experienced higher growth potential, but with
higher risk.
There are presently six classes of Market Cap: Mega Cap, Big/Large
Cap, Mid Cap, Small Cap, Micro Cap
and Nano Cap. Their exact definitions presently varies. The following generally defines
the cap of a company;
Mega Cap: Market cap of $200 billion and greater
Big/Large Cap: Market cap of $10-$200 billion
Mid Cap: Market cap of $2 billion to $10 billion
Small Cap: Market cap of $300 million to $2 billion
Micro Cap: Market cap of $50 million to $300 million
Nano Cap: Under $50 million
ACE'S assigns an Excellent rating to Small Cap stocks; Good to Mid
Caps; Average to Big/Large Caps; and Below Average to Mega Caps. ACE'S
excludes Micro and Nano Caps in its stock picks.
Net Income - is a company's total sales less total expenses (that is, expense
factors for costs of doing business,
depreciation, interest, taxes, and other expenses) for a specific period.
Net Worth - the
amount by which a company's
or individual's assets exceed their liabilities. For a company, this is known as
shareholder's equity.
Pick-of-the-month stock - a
stock that is featured by ACE'S as the focus stock to seriously consider for investment for
the particular month.
Pick-of-the-month stock report - an expanded evaluation report
focused on the
particular pick-of-the-month stock.
Operating Margin - is a variant of profit margin. It indicates how
much out of every dollar of sales the
company makes, before interest and taxes.
Price-Earnings (P/E) ratio -
is a ratio of a company's current share price compared to its per-share
earnings. The P/E ratio is a much better indicator
of the value of a stock than the market price alone.
In general, a high P/E means high projected earnings in the future. As such, the
P/E ratio could be interpreted as the
reflection of the market's optimism concerning a firm's growth prospects. To
determine whether a particular P/E is high
or low, take into account a company's growth rates; and the P/Es of other
companies in the same industry. Historically,
the average P/E ratio in the market has been around 15-25.
Price Growth - is the 52-week increase in the price of a
stock. Its is displayed as a percentage. A price growth of 75% or more is
considered excellent; 45% to 74.9% is good; 25% to 44.9% is average; and less
than 25% is poor.
Profit Margin - is
calculated as gross profits divided by sales. The margin measures how much out
of every dollar of sales a company
actually keeps in earnings. Profit margin is very useful in comparing companies
in similar industries. A higher profit
margin indicates a more profitable company that has better control over its
costs compared to the competitors in the
industry. Profit margin is displayed as a percentage. The higher the margin the
better it is for the company. Investors can
look at margins to assess the quality of a company. If a company is increasing
its margin over time, it is earning more per
dollar of sales.
Return on Assets (ROA) - is an indicator of how profitable a company is relative to its total assets.
It is calculated by dividing a company's
annual earnings by its total assets.
Return on Equity (ROE) -measures how well a company used reinvested earnings to generate additional
earnings. It is equal to a company's after-tax income (after preferred stock
dividends but before common stock dividends) for a fiscal year divided by book
value. ROE indicates how much profit a company is able to generate given the
resources provided by its stockholders.
Return on Investments (ROI) - measures how effectively the firm uses its capital to generate profit. It is
calculated to a company's fiscal year income divided by common stock and
preferred stock equity plus long-term debt.
Risk Level - An estimate
of a stock's expected price volatility. Measured on a scale of 1 to 5, 1 being
Low risk, 3 being Average risk, and 5 being High risk.
Sales, Gross -
Total sales that is
not adjusted for any other charges. It is determined by adding all sales
invoices. Gross sales measures the amount of product that a company sells
relative to its competitors.
The magnitude of a company's sales figure is important as is the growth of
the sales figure from
year-to-year. Generally, a high sales figure is preferred than a lower figure.
Also, a steady and appreciable growth in a
company's total sales from one year to the next is a key indicator on how a
company is able (or unable) to sustain and
improve the utility of its products and services in the marketplace.
Sector, Business - Groupings of stocks depending upon the company's
business. The market is broken up into several sectors. Some of these are the
transportation, technology, health care, financial, basic materials, services,
etc. sectors.
Share - Another name for a stock.
Shareholders' Equity -
the amount of the company that is
financed through common and preferred shares.
Also known as share capital, net worth, or stockholders' equity.
Stock -
A security instrument
that signifies ownership in a corporation and represents a claim on a portion of
the corporation's assets and earnings. There are two main types of stock: common
and preferred. Common stock usually entitles the owner the right to vote at
shareholder meetings and to receive dividends that the company has declared.
Preferred stock generally does not have voting rights, but has a higher claim on
assets and earnings than the common shares. Also known as shares, or equity.
Stockholders' Equity - Often referred to as the book value of the
company. Specifically, the
balance sheet item that includes capital received from investors in exchange for
stock, donated capital, and retained earnings.
Stop-limit Order - an order to buy or sell a quantity of a
security at a specified price or better, but only after a specified price has
been reached.
Traded Volume - is the actual number of shares traded daily. Volume could be used as a gauge of the demand for a stock. Average Volume is the
n-day moving average of daily
volume. ACE'S assigns an Excellent rating for
+1,000,000 trading volumes; Good for 500,001-999,999 volumes; Average for
100,000 - 500,000 volumes; and Below Average for -100,000 volumes.
TTM
- Trailing twelve months; an amount or figure that pertains to the past 12
months..
Value Stock - a stock that trades at a lower price relative to its
dividends, earnings, sales, and similar fundamentals. As such, they are
considered undervalued by certain investors. |
