Linking stock values of shares not in terms of revenues and sales base is pretty well accepted practice these days, but choveka who invented cost-BC odazhbi is still in the list of winners with his methodology today - John Reese - Founder of Validea Capital Management.
In 1984, Kenneth Fisher "send" shock wave to conscious investment world by calculating the saotnosheieto between price and yield P / E. Fisher-son of Philip Fisher, who is known as the "Father of developing stock markets investment" realizes there was a big hole in the usefulness of the ratio P / E.
Part of the problem explains in his book "Super Stocks" and that income and profits even good companies may vary considerably from year to year. The decision to replace equipment or facilities within a year instead of in another, the use of funds for new research that will help the company to collect substantial profits, but in later times, as well as changes in accounting methods can convert profits from one quarter to the next without losses to recognize what Fisher believes that it is really important in the long term: how well or poorly presented the main activities of the company.
While revenues can fluctuate, Fisher found that sales are much more stable as a ratio. In fact, it found that sales of what he called "Super Companies" or rather are those who are able to increase the market price of 3 to 10 times as the value in a time period of three to five years can drastically decrease and reduce it significantly.
Therefore, he is a pioneer in the introduction and use of a new method of assessing the availability of cost-sales (PSR), which compared the total price of the shares of the company to generate sales of the company.
Fisher notes and summarize the results in the PSR creating a ratio of total investment language and helped make it one of the most prominent investors in the world. (It is a perennial present on the list of "Forbes" and "400 Richest Americans", its management company manages money tens of billions of dollars, and he is one of "Forbes" longest-serving in the magazine).
Common sense, mostly quantitative approach outlined in the "super shares" caught my attention and made me create a strategy based on the ratios of Fisher - Guru.
While PSR is key to the strategy of Fisher, himself warned not to rely exclusively on this. Terrible companies can have low values of PSRs simply because the investment world knows they are headed towards financial ruin.
The variety of variables in my model based on Fisher cover a large area and therefore I think he will continue to work long after the PSR has become a familiar tool for analysis. Although use PSR as a focal point, also provides information that companies have strong profit margins, revenue growth, increasing both the cash flow and the low ratio between liabilities and equity.
So, already shapely approach can help investors overcome the worst periods in which each investor goes on the market. This model will continue to pay dividends in the long run.
Next five shares currently fall to the portfolio assessed with the approach of Fisher:
* Northrop Grumman (NOC)
* Autoliv (ALV)
* Coca Cola FEMSA SAB de CV (KOF)
* The Warnaco Group (WRC)
* General Dynamics (GD)
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