SA's Value Metrics / Letter Grades

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Example - A/o 9/5/20, $PRTK's value grade is a D.. When opening up the details of this grade, the 'relevant' metrics (Anything not listed as 'NM') does not show a single grade below C-.   Where is SA coming up with a letter grade of D under value, if the average of all metric details does not compute to a grade of D (FWD/Sales, TTM/Sales, etc)?  Are there underlying metrics which are not shown or is this just a consistent bug?  I run across this frequently, not only on this TICKR.

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SA Admin Kushal Mehrotra
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Please find below the response from our Quant Ratings team:

"We appreciate the use of our quant factor grades. This response will address two questions that you have brought forward. 1st, The factor roll up grade (Value grade) being lower then the underlying Value metrics. 2nd, The frequency of change to the Value grade.
1. The grades are based on zscores. Zscores give you an idea of how far from the mean or median a data point is and the score is than converted to an academic letter grade. The individual underlying value metrics can post grade in a 'B' range as an example on a relative basis to the sector. However, when all the underlying value grades are added up, the overall roll up grade could have a zscore or grade that is lower than the sector. In other words, both the underlying metrics and the roll up grade have different scores compared to the sector. Additionally, not all the underlying metrics are equally weighted. Our weightings are proprietary information and the weightings are not displayed.
2. The frequency of change to a value metric often is dependent on the volatility of the share price or . Earnings may be unchanged, but the fluctuating price would change the P/E ratio or changing EV would impact the EV/EBITDA ratio as an example. The value ratios are refreshed and scored every day. Hence, there can be and often is fluctuation to where the metric stands compared to the sector. I hope these answers are useful. Thank you"

Hope this helps, Feel free to reach out in case further assistance is required.

Regards,
Kushal Mehrotra
Data QA Analyst, Seeking Alpha

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SA Admin Kushal Mehrotra
  • Not a bug

Hi,

Please refer to the 

Quant Ratings And Factor Grades FAQ
Hope this helps, Feel free to reach out in case further assistance is required.

Regards,
Kushal Mehrotra
Data QA Analyst, Seeking Alpha

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SmallCapResearch
Quote from SA Admin Kushal Mehrotra

Hi,

Please refer to the 

Quant Ratings And Factor Grades FAQ
Hope this helps, Feel free to reach out in case further assistance is required.

Regards,
Kushal Mehrotra
Data QA Analyst, Seeking Alpha

I have read through the FAQ a few times, prior to this.  It does not provide an answer to my question (from what I see).  See PRTK's value grade... This fluctuates from D- to B/C almost weekly, just yesterday it was a B and now a D-.  How is that possible? Given the value grades are determined by fundamentals and industry comparison, there simply can not be that large of a discrepancy, seemingly overnight.  As I had previously stated, this is a common occurrence and does not add up.

Thanks

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Hi SmallCapResearch,

I'll relay your query to our team concerned with the Quant Ratings and we'll get back to you shortly.

-Kushal

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SA Admin Kushal Mehrotra
  • Answer
  • Awaiting Customer Reply

Please find below the response from our Quant Ratings team:

"We appreciate the use of our quant factor grades. This response will address two questions that you have brought forward. 1st, The factor roll up grade (Value grade) being lower then the underlying Value metrics. 2nd, The frequency of change to the Value grade.
1. The grades are based on zscores. Zscores give you an idea of how far from the mean or median a data point is and the score is than converted to an academic letter grade. The individual underlying value metrics can post grade in a 'B' range as an example on a relative basis to the sector. However, when all the underlying value grades are added up, the overall roll up grade could have a zscore or grade that is lower than the sector. In other words, both the underlying metrics and the roll up grade have different scores compared to the sector. Additionally, not all the underlying metrics are equally weighted. Our weightings are proprietary information and the weightings are not displayed.
2. The frequency of change to a value metric often is dependent on the volatility of the share price or . Earnings may be unchanged, but the fluctuating price would change the P/E ratio or changing EV would impact the EV/EBITDA ratio as an example. The value ratios are refreshed and scored every day. Hence, there can be and often is fluctuation to where the metric stands compared to the sector. I hope these answers are useful. Thank you"

Hope this helps, Feel free to reach out in case further assistance is required.

Regards,
Kushal Mehrotra
Data QA Analyst, Seeking Alpha

Avatar
SmallCapResearch
Quote from SA Admin Kushal Mehrotra

Please find below the response from our Quant Ratings team:

"We appreciate the use of our quant factor grades. This response will address two questions that you have brought forward. 1st, The factor roll up grade (Value grade) being lower then the underlying Value metrics. 2nd, The frequency of change to the Value grade.
1. The grades are based on zscores. Zscores give you an idea of how far from the mean or median a data point is and the score is than converted to an academic letter grade. The individual underlying value metrics can post grade in a 'B' range as an example on a relative basis to the sector. However, when all the underlying value grades are added up, the overall roll up grade could have a zscore or grade that is lower than the sector. In other words, both the underlying metrics and the roll up grade have different scores compared to the sector. Additionally, not all the underlying metrics are equally weighted. Our weightings are proprietary information and the weightings are not displayed.
2. The frequency of change to a value metric often is dependent on the volatility of the share price or . Earnings may be unchanged, but the fluctuating price would change the P/E ratio or changing EV would impact the EV/EBITDA ratio as an example. The value ratios are refreshed and scored every day. Hence, there can be and often is fluctuation to where the metric stands compared to the sector. I hope these answers are useful. Thank you"

Hope this helps, Feel free to reach out in case further assistance is required.

Regards,
Kushal Mehrotra
Data QA Analyst, Seeking Alpha

Appreciate the response, this does help clear things up.

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AVA++

Agree!