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9 Golden Rules screen

The Company Summary screen is the first screen displayed once a company is selected and is predominantly used to assess a company’s fundamentals.  

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The company summary screen should be considered the homepage for a specific security. It houses the high-level fundamental information that users need to make an informed investment decision.

Quick access Folders Tab

Within this tab, you can find all ASX stocks, including those currently in your portfolio, watchlist and existing Star Stocks. If the Folders Tab will not be used for some time, the data display function of this feature can be hidden by clicking on the  located in the top right-hand corner of the Folder tab panel.

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Top of the screen

The top of the screen clearly highlights the most relevant pieces of information pertaining to Golden Rules 1, 2 and 3 (Our primary Golden Rules). These are our Star Stock criteria.

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The Golden Rules 1, 2 and 3 are highlighted as per their rating. If a number is golden, it passes that rule. For all Star Growth and Star Income stocks, each of the headings has a golden number   .

Tip: Click on a number to view a description of the rule.

In the case of Golden Rule 2 there will also be a star symbol denoting whether the company meets the growth and/or income criteria. A green star represents Borderline Star Growth Stocks, a gold star represents Star Growth Stocks, and a purple star represents Star Income Stocks.  

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Golden Rule 3 is sourced from consensus estimates (when available). You will need to read the active risks in the ‘Analyst Comments' section > 'Risks' tab to gain a complete perspective as to Golden Rule 3.  

It is important to note that for non-Star Stocks, a red number mceclip0.png will appear next to the criteria that it fails. Subsequent Golden Rule criteria will not be assessed and, therefore, will appear Blue.

All data that is price sensitive is 20 minutes delayed, updated at 5-minute intervals. Should you wish to refresh the data on the page, click on the time stamp located in the top right of the screen.

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Analyst Comments

This section houses our Analyst Commentary, bringing together our Strategic Comments, Latest Key Updates and Active Risks into one concise, easy-to-find location.

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Bottom part of the screen

This section displays our Secondary Rules 4-9. It has an overview and an easy to read snapshot of how a company measures against Lincoln's 9 Golden Rules.

Golden Rule 4: Share Price Sentiment

The share price reflects the market view of a stock. A positive trend indicates the markets' appreciation for the stock, its business, and its industry.

There are periods that a disconnect can occur between the fundamentals of a company and its share price. Non-trend sensitive investors may see the share price decline of a quality Star Stock as a buying opportunity if they are comfortable with the active risks. While at other times a downtrend, may also prove to be a precursor to a current active risk which is now becoming more elevated in the eyes of investors.

For moderately to high trend-sensitive investors, who are wary of prices that fall into a downtrend, including Star Stocks, we provide a range of indicators that can be overlayed on the chart to help those sensitive to any possible catastrophic declines. Our SD30TSR Stop Loss indicator and SDMAX have been back tested on our historic Star Stock selections. They have proven to help avoid some catastrophic declines while not compromising what is already historic solid Star Stock returns. 

Price Stop loss alerts can also be overlayed here (by clicking on the bell icon) to assist with the timing of an exit in unhealthy, high-risk speculative investments.

You're also able to view the percentage of shares a company has shorted against (Percentage Shorted). When there is a spike in the amount of short interest and/or there is a consistently high level of short interest, it can mean negative sentiment exists and that the stock may be in for a period of extreme volatility. 

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Golden Rule 5: Share Price Value 

A Consensus Price Target (where available), represents the market's view on the company.

Unlike physical assets, the value of a company is extremely hard to quantify and highly subjective because it relies on numerous forward assumptions.

Value stocks tend to be cheap for a reason, and it is usually because of heightened active risks which could lead to further losses - a concept known as the “value trap”.

Generally, investors need to be prepared to pay a premium for quality stocks.  

 

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Golden Rule 6: Liquidity and Size 
 
At some point, an investor will wish to sell their share investment. To ensure they can sell the entire holding at any time, we suggest that the average 'daily volume traded' figure is at least five times the exposure level.

Ideally, investors should look for stocks with much higher liquidity levels to ensure they can safely enter, and more importantly – exit within the timeframe and at the price they want.

We will generally not analyse a stock if it's average daily traded is less than $200,000

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Golden Rule 7: Principal Activities

Before investing in a company (and becoming a part-owner), an investor should understand its operational model (e.g., how it generates sales), gain familiarity with the products or services it provides, and ensure it aligns with its values.  

There may be ethical and moral reasons why investors may choose not to invest in a company. For example, if you are an ethical investor, you may want to understand whether the principal activities involve gambling, weapons, or fossil fuels.

 

Direct access to the latest Annual Report
Downloadable link to the company's latest Annual Report gives you a complete picture of their activities and financial performance at a glance.

Executive Leaders - Remunerations 

The remuneration of senior executives is also scrutinised to determine whether their remuneration is appropriate relative to the level of shareholder returns generated in the past. It is always a bonus if the founder is still involved, whether running the business as CEO or as chairperson.

 

Ideally, company leaders should have their ‘own skin’ in the company through personal holdings, which demonstrates their belief in the company and its future – this is more prevalent and important in smaller to mid-size companies.

Earnings breakdown
To further help investors understand the drivers of a company’s performance, we highlight the breakdown of earnings so that an assessment of the drivers for growth can be made, including an understanding of the concentration/geopolitical risks that may be present.

Additional details can be accessed via the ‘More’ button for those who wish to drill down further.
 

 
Golden Rule 8: Latest Price Sensitive Announcements

Company price-sensitive announcements can immediately impact stock prices positively or negatively.

Investing in the share market is difficult at the best of times, let alone investing in companies with grey clouds on the horizon.

Keeping abreast of price-sensitive announcements is important in understanding the drivers of earnings and share price movements.

For Star Stocks, the Lincoln Indicators team of analysts deliver their view on any significant announcement the company makes and the likelihood of any impact on its Star Stock status in the near future.

Companies with negative announcements can lead to elevated active risks under Golden Rule 3. 

Golden Rule 9 - Follow the Rules 

Build your investment framework around Lincoln’s Golden Rules according to your investment objectives, tolerance to risk and being disciplined in your portfolio decision-making process.  

Peer Comparison

The Peer Comparison table located at the bottom of the 9 Golden Rules screen is an intuitive way of benchmarking a company to its industry peers. If a company in the table warrants further investigation, you can click on the company name/code, and the 9 Golden Rules screen for that company will open. 

This entire 9 Golden Rules screen has been designed to bring your attention to the most important information relating to a particular company.

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