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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.


  Last modified: 10/12/14