At first, lets take a look at the indicator to know how it looks like and identify some remarkable levels.

In the chart above, we can see VZO indicator. This indicator has a range between 100 to -100. There are some levels shown in the indicator between this range, these levels are, 0.0, 40, 60, -40, -60.

0.0 level is very important for this indicator. VZO values are positive above 0.0 and above this 0.0 it is considered as bullish region. Inversely, below 0.0 it is bearish region. So when VZO line is above 0.0 line then the stock is in bullish or up trend and when below 0.0 then the stock is in bearish or down trend.

40 and -40 levels determine whether the stock is overbought or oversold. If VZO line is above 40 then the stock is in overbought region. Inversely, if VZO is below -40 then the stock is in oversold situation.

The 60/-60 level actually marks extreme optimism or pessimism.

Trading Tactics:

1. Buy, when VZO crosses -40 line from below and sell when VZO goes above 40 line and cross this 40 line from above.

2. Another way to buy/sell using VZO is to use the 0.0 or centerline crossover. Buy when VZO crosses the 0.0 line from below and sell when VZO goes above 40 line and cross this 40 line from above, just like shown in the chart given below.

This technique works very well when the market or stock is in a strong trend. In strong trending market you will get lots of winning trades if you use these buy/sell signals. Here is an example of trading signals when DSEGEN index was in a strong trend.

3. Buy when VZO crosses 40 line from below and sell when VZO crosses 40 line from above.

4. As we have known that when VZO line crosses 0.0 line, it enters into bullish region or up trend. After entering into uptrend buy crossing 0.0 line, a stock or market tends to get support whenever it comes near 0.0 line due to short correction it tends to bounce back or pullback to the prevailing major trend. So, when the major trend is up as VZO is above 0.0 line, it can be considered as a Buy signal whenever VZO line hits 0.0 line and shows a slight upward turn in VZO line. After buying, sell when VZO crosses 40 line from above.

5. This technique is quite similar to the technique mentioned above. When VZO crosses 0.0 line from below but fails to cross above 40 line and it cross 0.0 line from above but within a short time it bounce back before entering -40 line and cross 0.0 line 2nd time then it is a pullback Buy signal. After buying a reverse 0.0 line crossover (VZO crossing 0.0 line from above) is Sell signal.

6. VZO can detects divergences like many other indicators. A trader can detects short term trend reversals by using VZO divergences. Trading and detecting divergences is not so easy so, one should know about different types of divergences well before using it. Bullish Regular Divergence should be considered as a Buy signal and Bearish Regular Divergences should be considered as sell signals. In case of exit signals you can use 40/-40 line crossovers.

You will find the AFL of VZO in the AFL section of this blog.

Here is the snapshot of the Indicator.

Here is the AFL,

function VZO( Period )
{
 R = sign( Close - Ref( Close, -1 ) ) * Volume;
 VP = EMA( R, Period );
 TV = EMA( Volume, Period );
 return Nz( 100 * VP / TV );
} 

Period = Param("Period", 14, 1, 100 );
Plot( VZO( Period ), "Volume Zone Osc" + _PARAM_VALUES(), colorBlack, styleThick );
Plot( 60, "", colorLightOrange, styleNoLabel );
Plot( 40, "", colorLightOrange, styleNoLabel  );
Plot( 0, "", colorBlack, styleNoLabel  );
Plot( -40, "", colorLime, styleNoLabel  );
Plot( -60, "", colorLime, styleNoLabel  );

A stock is witnessing a bottoming formation, you make your analysis perfectly and buy the stock in anticipation of a major breakout that will lead to a sharp rise in the future. You wait for a few weeks, the stock still trades in its consolidation range, but you feel bored and sell to join another more volatile stock. Ultimately, the stock witnesses its major breakout and rises sharply, only after you sold. Patience is a virtue.  Sometimes your interpretation is very good, your expectations are right, but the lack of patience ruins your trade. As we know, the more the stock consolidates, and the less volatility it witnesses, the sharper the next move, either to the upside or to the downside. This is why, sometimes, we make a good analysis but the stock stays more time in its consolidation before ultimately breaking out in our expected direction. Patience is a very important element for successful trading and investing. Patience is good when your technical opinion on the stock did not change. However, if the overall picture changes and your interpretation changes, you will have to get out, take your loss and look for another opportunity. Patience is only useful when your interpretation and your analysis did not change. Obviously, we cannot buy and hold a stock during a downtrend and say that patience is a virtue. As mentioned, it is important to have patience when we are expecting a certain move that did not come yet.

Humbleness

Being humble is very important, especially when your performance gets better and your predictions reach a high degree of accuracy. The more knowledge you acquire, the more money you make, the more professional you become, the more you have to be modest. The stock market does not know that you are a professional gentleman. If it moves against your expectations, it will do so, even if you are the best trader in the world. People who became known, who were called Gurus, who had the best timely calls, but who believed in themselves were all wiped out of the market. Always know that the market is stronger than you. It does not matter how much money you have made, it will all evaporate if you believe too strongly in yourself and disregarded market movements. Overconfidence is a lethal weapon. It is important to consider losses as a part of the cost that you have to take. Losses are a must, don’t try to avoid them, they will come. All that you can do is to control them. Controlling your losses is the key for success. If you lose your modesty, you will lose the interest to control your risk, because you will not bear to lose anything. This is the beginning of the end. One of the danger signs that might face you occurs when people around you, and in the marketplace, talk about you and about your good performance. They are ready to listen to you and blindly follow you. You are now in the danger zone, the red zone, because uncontrollably your modesty begins to diminish. If you leave yourself to the fake feeling of this extreme success

(Note: the word extreme success, does it remind you of extreme bullishness and extreme bearishness that appear at major peaks and major bottoms?), you will begin acting in an irrational way, you will become arrogant, talking nonsense. People will still follow you, but in the end, your integrity will be lost as well as your ego. Be very cautious when you feel that your success begin to reach an extreme. Slow down, take a break, think deeply, and win your modesty again. Gurus, those who are blindly followed by the crowd, destroy themselves. They die poor and with zero ego. It is nice to be successful, to have good performance, but being modest, and knowing that the market is smarter than you, you will be able to protect yourself from the unknown future. During the 1999-2000 boom of the market in the USA, there were a few strategists who had very good calls. Some of them were strategists who worked in very big companies. They kept on giving great calls, and were widely followed by the crowd. The fake sense of unlimited success disturbed their views during the major peak of 2000.

They were extremely bullish. The lower highs in the American markets were not obvious to them. The Market was already sliding in a slope of hope, and these great economists kept on their bullish views until they lost a lot of their credibility. In his book, Jesse Livermore, World’s Greatest Stock Trader, Richard Smitten mentions in the start of the book “In 1923, seven men who had made it to the top of the financial success pyramid met together at the Edgewater Hotel in Chicago.

 As many of you may be aware the importance I provide for the volume in my analysis. Any move of a stock which is not aided by volume will not last. Volume is the fuel for any trend. So naturally any trend strength indicator without consideration of the volume cannot provide the real picture. The ADX calculation totally ignores volume and purely based on the price movement.  Price action combined with volume would be definitely provided a more realistic picture. This thought has inspired to experiment with the ADX to include the volume aspect.  The basis for the ADX calculation are the difference between the High of a day and the High of the previous day and also the difference between the low of the day and low of the previous day. In other words it uses the momentum of the Highs and Low. This momentum is fuelled by volume. So we will add a volume factor to this momentum. To calculate the volume factor we take the ratio of the current volume and the average volume. We will bias the momentum of the Highs and Lows with this volume factor. The remaining of the calculation will be based on these biased values and the final ADX, +DI and –DI values will be biased by volume. The result of this is quite evident from the chart below. The resultant +DI and –DI are much more responsive to the volume and they clearly indicate which moves are volume driven and which are not.  The ADX also quickly increase in values when the volume increases indicating increased trend strength”.

Download VADX

DSEGEN

Here is the AFL file,

Click here to download this AFL

How to import the AFL:

• Download the AFL
• Go to Amibroker folder of your Program file such as C:\Program Files (x86)\AmiBroker\Formulas
• Paste the AFL in a folder
• Open Amibroker software and you will get the AFL in the folder where you have pasted the AFL file.

The idea behind Piotroski’s paper Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers is that valuation ratios, such as price-to-book value (or as he phrased it, BM or high book-to-market), are worth noting but not, by themselves, sufficient to help us find good investment ideas. Many stocks that are cheap under this measure are cheap for good reason; because the companies are weak, etc. He investigated whether the performance of a portfolio of high BM stocks could be improved “by using simple historical screens based on historical financial performance” (page 2) to pick out better companies. For many real-world investors, that may not sound like a bold proposition. It’s what those of us who do fundamental analysis, and especially those who use stock screeners to look for ideas, do all the time. But in the context of academia, where the emphasis is on intricate mathematical proofs that a model must work, pretty much because it derives from pure logic, Piotroski felt a need to speak in an almost apologetic manner about his reliance on “heuristics” (ideas that stem, not from theory but from everyday investigation, trial-and-error, etc.). It’s a shame that Piotroski felt a need to be so humble about heuristics, because that’s what leads to real-world success. The strategy Piotroski used to identify better high BM stocks is not elaborate. He uses a series of fundamental screening-type tests such as whether return on assets increased in the past year, and scores companies one point if that’s the case and zero otherwise. Each company’s final score is computed by adding up all of its one-or-zero factor scores, and he favors the highest scoring companies.

The Strategy: 
We start with the basic rules of Joseph Piotroski screen:

Eliminate companies classified in the Miscellaneous Financial Services Industry, most of which are investment companies and funds and not the kind of stocks this all-star tended to seek.
Trailing 12 month “Business Income,” defined as Sales minus Cost of Goods Sold minus Selling, General & Administrative expenses (unusuals that are often included in “operating Profits” are
eliminated) must be in the black.
Trailing 12 month Cash from Operations per share must be in the black
Trailing 12 month Cash from Operations per share must exceed trailing 12 month EPS.
Trailing 12 month Gross Margin must exceed Gross Margin for the prior 12 months.
Debt-to-assets in the latest quarter must be less than Debt-to-assets in the prior-year quarter.
Current Ratio in the latest quarter must be above the Current Ratio from the prior-year quarter.
Trailing 12 month Asset Turnover must exceed Asset Turnover for the prior 12 months.
Trailing 12 month Return on assets must exceed Return on assets for the prior 12 months.
Average shares outstanding in the trailing 12-month period must be less than average shares in the prior 12-month period.

Screening rules for stock selection:

Price-to-Book, latest quarter – 50% of total
Fundamentals – 50% of total
Trailing 12 month Gross Margin minus Gross Margin for the prior 12 months (14.29% of category)
Trailing 12 month Cash from Operations per share minus trailing 12 month EPS (14.29% of category)
Debt-to-assets in the latest quarter minus Debt-to-assets in the prior-year quarter, lower is better (14.29% of category)
Current Ratio in the latest quarter minus Current Ratio in the prior-year quarter (14.29% of category)

Trailing 12 month Asset Turnover minus Asset Turnover for the prior 12 months (14.29% of category)
Trailing 12 month Return on assets minus Return on assets for the prior 12 months (14.29% of category)
Average shares outstanding in the trailing 12-month period minus average shares in the prior 12-month period, lower is better (14.29% of category)

Collected from www.portfolio123.com

I am sharing the afl for the same. There are two indicators. One is a Raw Buying and selling pressure Indicator.  The Raw buying and selling indication is provided in terms of a Histogram. Green bars above zero show the buying pressure and the red bars below the zero line show the selling pressure.  This presents a good visual representation of the dominating pressure.

The second is a smoothed version with version with a yellow line representing the selling pressure and a turquoise line which represents the Buying pressure. If the turquoise line is above the yellow line it would mean that the Buying pressure is more and vice versa. The difference between the two is plotted as a Histogram. This is a cumulative value of the buying and selling pressure and provides a easy visual presentation of the dominating pressure. These two indicators can easily compliment your main strategies like Volume Spread Analysis..

Download from this Link:

BASP Smoothed with Histogram

BASP Raw

Here is the Image of two AFLs.

Buy Low, Sell High, Easy To Say, Hard To Do

Chasing stocks is reckless. Don’t run with the mob. The key to success is doing the opposite of what ‘Mr. Market” does. Etc. etc. etc. How do you feel about such sentiments? Let’s try a little test. Below are the most recent sections sliced from two Yahoo! Finance price charts. Don’t think carefully about the question I’m about to ask. Answer
quickly from your gut. Which one would you rather buy . . . using real money . . . right now?

Forget about which stocks these images depict. I’m just looking for a sense of emotional attraction or repulsion based only on the recent price action. On that basis, aren’t you draw toward Choice B? Wouldn’t you at least like to find out what stock it is and look further into it? As to Choice A, aren’t you tempted to check your portfolio to make sure it isn’t something you own? Perhaps you might be interested in it if you took some time to dig, but at this moment, doesn’t it have something of a guilty-until-proven-innocent flavor?
I don’t mean to cast aspersions on Choice A. I know full well how rewarding such situations can be if you do your homework and pick and choose among them. I’ve often done that sort of thing and undoubtedly will continue to look for such opportunities in the future.

By the same token, let’s also respect Choice B. Price charts like that don’t usually materialize unless something is going right for the company, probably many things. Will they continue to go right in the
future? Maybe. Maybe not. But realistically, turning a business 180 degrees from good to bad or from bad to good can be more like turning an ocean liner than a rowboat; it can be done, but not usually
instantaneously. So there’s a reasonable chance that whatever good things are happening may persist. So there’s much to be said for a well diversified portfolio filled with stocks whose charts look like Choice B.
Yes, it’s true: the trend can be a very good friend.

Making It Work

Obviously, if you want a trend but can’t find one that works for you, you can stay in cash or fixed income. Indeed, it is possible to come away from some guru books, including Martin Zweig’s Winning On Wall Street, with the idea that this is what you should do. Realistically, though, most equity investors are reluctant to completely avoid the market for a significant amount of time. Even the Zweig Fund (ZF) tends to be invested mainly in equities at all times. But even during bad times, you can still find individual stocks with favorable trends — the Chart depicted in Choice B reflects a time when the market as a whole performed very badly — and others whose trends are less negative than most. There’s no law requiring the trend to be obvious.
There’s another aspect to befriending the trend that doesn’t always get as much attention as it deserves: making sure there are sound reasons for a favorable trend to look the way it does. This is the difference between thoughtful trend investing and mindless crowd following.
The Zweig strategy pays a lot of attention to what’s behind the trend, the make sure there is objective merit to the situation. Details of the Portfolio123 strategy inspired by his writings are spelled out in the
Appendix below but in sum, Zweig looks for substantial performance in terms of EPS growth and sales growth. Moreover, he pays close attention to stock valuation (he’s not by any means a bottom fisher, but he does want to see reasonable valuations) and also considers insider activity. There are times when the market will emphasize rotation, making trend-following less effective. That’s why it can be so important to make sure strong trends are backed by strong fundamentals. That will give your portfolio a better chance of hanging in there during times when trending strategies go cold and make it feasible for investors to accept, rather than fight, whatever natural affinity for trend following they might have.

Strategy:

Eliminate companies classified in the Miscellaneous Financial Services Industry, most of which are investment companies and funds and not the kind of stocks this all-star tended to seek.
P/E based on estimated current-year EPS is greater than one-half the overall median and less than two times the median.
Year-to-year EPS growth in the most recent quarter must have exceeded the rate of year-to-year.
EPS growth in the preceding quarter.
The 3-year rate of annual sales growth is at least 75% of the rate of three-year EPS growth.
The company’s EPS in the most recent quarter must have exceed the consensus analyst estimate.
The stock is in the top half in terms of the 20-day exponentially weighted moving average divided by the 200-day average.
The stock must have outperformed the market over the past six months.

Companies that pass are then sorted based on the Martin Zweig ranking system:

Growth – 75% of total
Standard Growth – 35% of this category
3-year EPS Growth rate (20% of this sub-category)

Trailing 12 month EPS growth rate (30% of this sub-category)
Latest quarter year-over-year EPS growth rate (50% of this subcategory)
Acceleration – 65% of this category
Acceleration in year-over-year EPS growth rate, latest quarter versus preceding quarter (30% of this sub-category)
Acceleration in year-over-year Sales growth rate, latest quarter
versus preceding quarter (20% of this sub-category)
EPS Growth Acceleration, latest quarter (year-over-year) rate versus
3-year rate (15% of this sub-category)
EPS Growth Acceleration, latest quarter (year-over-year) rate versus
trailing-12-month rate (35% of this sub-category)
Market Performance – 20% of total
4-week relative (to index) share price % change (60% of this category)
13-week relative (to index) share price % change (25% of this category)
26-week relative (to index) share price % change (15% of this category)
Insiders – 5% of total
Number of Insider Buy Transactions (higher is better) (80% of this category)
Number of Insider Sell Transactions (lower is better) (20% of this category)

Collected from www.portfolio123.com

William O’Neil did not come right out and say the CANSLIM stock-selection strategy he developed is designed to buy high and sell higher. But considering O’Neil’s disdain for PE as an analytic tool and his heavy demands when it comes to growth, it’s east to see why one might assume he said it. Intellectually speaking, that would outrage many. Interestingly, though, the model we developed based on our application of CANSLIM (with no reference to PE or any other valuation metric) performed quite well, even during bearish periods, enough so to merit a look even by those who usually shun high valuations.

A very demanding model:

While O’Neil does not ask for value, it does seem that he’s asking for pretty much everything else. Consider
the acronym CANSLIM. Without attempting to list everything O’Neil says in How To Make Money In Stocks (2009 Edition), here are some highlights:
C – Current Earnings

Look for strength in current earnings, defined as strong growth rates and a trend of acceleration. Looking at the company in question is obvious. O’Neil also considers other in the same industry, as validation.

A – Annual Earning
Look for strength in annual earnings trends, so you don’t wind up with a flash in the pan. But don’t focus myopically on EPS. Consider sales trends, earnings stability and quality (i.e. watch out for nonrecurring
items) and other factors such as margin and return on capital.

N – New Products, New Management, and New Highs

The first two are evident. The third refers to stock prices at new highs. We don’s want strong results in isolation. We want them to stem from bona fide catalysts. O’Neil stresses, here, that newness is most likely to come from smaller companies, as opposed to the better known and seemingly safer blue chips, which he sees as more concerned with maintenance rather than growth.

S – Supply and Demand (for the company’s shares)

To some extent, this is another variation on the small-company theme. O’Neil likes situations where institutional demand would weigh heavily on the supply of available shares, something that could exert quite a bit of upward price pressure on the stock if things go well for the company.

L – Leader or Laggard? (Guess which O’Neil prefers!)

Look for leadership; companies that are leaders within their industries and whose shares are market leaders.

I – Institutional Sponsorship

This refers to institutional buying, which O’Neil considers important as a driver of upward share price performance.

M – Market Direction (needless to say, we want it to be upward)

While O’Neil considers many factors in connection with individual companies, he also considers the overall market environment and prefers to buy into market strength. Perhaps the tone of the list can suggest why O’Neil gets away without using a valuation metric. He’s looking for very attractive situations, companies that would likely deserve any high valuations we encounter. That’s no small matter. Price ratios alone do not make for sensible value investing. There must also be a rational relationship between the quality of the company you buy and the valuation applicable to its shares. O’Neil is clearly aiming high with the latter, so can presumably tolerate high numbers in the former.

CANSLIM Model:

Eliminate companies classified in the Miscellaneous Financial Services Industry, most of which are investment companies and funds and not the kind of stocks this all-star tended to seek.
The percentage of institutional share ownership must rank at least 10% and less than 50% relative to all stocks.

The company ranks in the top 35% when it comes to year-to-year EPS growth in the latest quarter.
The company ranks in the top 35% when it comes to trailing 12 month EPS growth.
The company ranks in the top 50% when it comes to 5-year EPS growth.
The company ranks in the top 35% when it comes to share price percent change over the past 240 trading days (approximately one year).
The company ranks in the top 50% when it comes to the current share price divided by the 52-week high.

Among the companies that pass the above screen, we select the top 15 based on the O’Neil ranking system, which uses the following large (per the demanding nature of O’Neil’s strategy) list of factors:

Company EPS Growth – 25% of total.
EPS 3-year growth rate (5% of this category).
Trailing 12 month EPS growth rate (20% of this category).
Latest quarter (year–over-year) EPS growth rate (25% of this category).
EPS 3-year growth rate minus industry average (5% of this category).
Trailing 12 month EPS growth rate minus industry average (20% of this category).
Latest quarter (year–over-year) EPS growth rate minus industry average (25% of this category).

EPS Acceleration – Trailing 12 Months to Latest Quarter (25% of this category).
EPS Acceleration – 3-Years to Trailing 12 Months (25% of this category).
Company Sales Growth – 20% of total.
Sales 3-year growth rate (5% of this category).
Trailing 12 month Sales growth rate (20% of this category).
Latest quarter (year–over-year) Sales growth rate (25% of this category).
Sales 3-year growth rate minus industry average (5% of this category).
Trailing 12 month Sales growth rate minus industry average (20% of this category).
Latest quarter (year–over-year) Sales growth rate minus industry average (25% of this category).
Industry EPS Growth – 25% of total.
Industry Average EPS 3-year growth rate (10% of this category).
Industry Average Trailing 12 month EPS growth rate (40% of this category).
Industry Average Latest quarter (year–over-year) EPS growth rate (50% of this category).

Market – 15% of total Share price divided by 52-week high (33.33% of this category).
Institutional Share purchases net of sales (33.33% of this category)
20-day exponentially weighted average stock price divided by 120-day average (33.33% of this category).
Company Quality – 10% of total.
Trailing 12 Month Operating Margin ranked relative to all stocks (12.5% of this category).
Trailing 12 Month Operating Margin ranked relative to industry (12.5% of this category).
5-year average Operating Margin ranked relative to all stocks (12.5% of this category).
5-year average Operating Margin ranked relative to industry (12.5% of this category).
Trailing 12 Month Return on Investment ranked relative to all stocks (12.5% of this category).
Trailing 12 Month Return on Investment ranked relative to industry (12.5% of this category).
5-year average Return on Investment ranked relative to all stocks (12.5% of this category).

5-year average Return on Investment ranked relative to industry (12.5% of this category).
Earnings Stability – 5% of total.
EPS Stability (50% of this category)

The size of unusual income-statement relative to Sales, lower is better (50% of this category)

Collected from www.portfolio123.com

Warren Buffett is often cited as the penultimate value investor. It is true that Buffett is very sensitive to how much he’s being asked to pay for shares. But there’s a lot more to what he does than value. He cares very deeply about the nature of the company itself, apart from how the
market values it shares. And when it comes to companies, he likes financial stability, good management, etc. as much as anyone. But what really sets Buffett apart is his quest for understandability, leading to predictability.

Warren Buffett Model:

The Portfolio123 Warren Buffett model bears much in common with the Benjamin Graham model. That should come as n surprise considering how Graham was Buffett’s teacher and the open admiration Buffett has expressed for Graham. But there are some differences that reflects factors Buffett has written about,
such as return on capital and book-value growth.
There was also a difference between student and teacher when it comes to dividends. The latter considered these important. Buffett certainly doesn’t object to them (he invests in dividend-paying
equities), but if we look at how he addresses the matter when it comes to Berkshire Hathaway (no cash dividends), it’s clear he’s not a big fan. Our model includes a rule pertaining to “sustainable” growth rate
(the retention ratio times return on equity); dividend payers can make the cut only if their returns are high enough to offset the company’s decision to do without some of the funds it could have reinvested in the business. Conversely, a low-return outfit can’t slip through merely because it reinvests all the funds it has.

Our Buffett model also has a company-size requirement, in contrast the Graham model which eschews this based on Graham’s writings. Buffett doesn’t talk much about this but he does list pretax profit above $75 million among his list of acquisition criteria. We don’t specifically mimic this. We assume Buffett would  tolerate less if the firm weren’t to be managed as part of the Berkshire family. Assuming a low multiple of pretax earnings and a “haircut” given that the companies lusted by the model wouldn’t necessarily be acquired by Berkshire, we impose a $250 million market capitalization minimum.

Here are the details:
The screen uses the following rules:

Market Capitalization is at least $250 million

Current ratio must be at least 1.5

Long-term debt must be no higher than 10% above working capital

EPS must be above breakeven in each of the last four quarters and in each of the last five annual periods

Trailing 12 month EPS most be above EPS in the latest annual period

EPS in the latest annual period must be above EPS in the prior year

Five-year average Return on Equity ranks in the top 25%

The trailing 12 month sustainable growth rate ranks in the top 25%

Among the companies that pass the above screen, we select the top 15 based on the Buffett ranking system, which uses the following factors:
Book Value – 33.33% of total
5-year growth rate in book value (100% of this category)
Valuation – 33.33% of total
Market Capitalization divided by “Business Income” as defined in the screen (22.5% of this category)
Price-to-Book Value (22.5% of this category)
P/E based on trailing 12 months EPS (13.75% of this category)
Price-to-Tangible Book Value (13.75% of this category)
Price-to-Cash Flow per share (13.75% of this category)
Price-to-Free Cash Flow per share (13.75% of this category)
Earnings Quality – 33.33% of total
EPS Stability, as defined by the standard deviation of EPS in the past 16 quarters, lower is better (50% of this category)
Cleanliness of Income Statement, as defined by the “absolute value” of the last four years worth of Business Income (which omits unusual items) minus the last four years of Operating Profit (which includes unusuals), lower is better (50% of this category)