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Weighting Formula

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Frequent Contributor
Greetings All I have a weighting formula which I am using to evaluare Shares. Your comments/critscims would be appreciate = especially the inclusion/exclusion of certain criteria and their respective weightings: Target Price :10 points. ( all a maximum of ). PE: 10 pts. DY : Actual DY expressed as points eg 5 DY = 5 points. Max 10. Quality :I use a PSG system which awards companies a rating based on certain fundamental criteria: Max 10. TNAV: 10 points the lowest TNAV gets 10. Liquidity: 5. HEPS Forecast: Actual Forecast divided by 2.eg HEPS forecast 10 = 5 points. ROC : 10 - best ROC gets 10. Broker recommendation : 20. eg Consensus 10 Standard 10 If it is an Outperform etc. Technical:10 If it is a buy on technicals it gets 10. Max Points 105.
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Does it work for you? Can you take a two shares & run the numbers through yr system so we can see the effect of yr points? What is the ultimate aim? Is it to evaluate between shares as to which is the better one to buy or does it help you choose which shares to buy? But in the end - it all comes down to - DOES IT WORK FOR YOU?
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Super Contributor
Looks like it is based almost purely on fundamentals. If so, left out a very nb measure: Price:Book value
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