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What do the coloured stars indicate?

We use a star colour system to help identify stocks that may suit different investment objectives.

Yellow stars

 

These denote Star Growth Stocks that are Stock Doctors top-ranking growth businesses that collectively suit investors who seek capital appreciation over the long-term.

SGS’s must pass Golden Rule 1 Financial Health (two consecutive periods of Strong or Satisfactory), Golden Rule 2 Past Financial Performance (sector-specific growth factors such as: Return on equity (ROE), Return on Invested Capital (ROIC), Return on Assets (ROA), Net Profit Margins (NPM), Earnings Quality (EQ), Revenue Growth (RG) and Earnings Per Share Growth (EPSG)) and Golden Rule 3 Outlook and Active Risks (growth criteria).

There will usually be approximately 30 SGS separated from Borderline Star Growth Stocks. This is done by a proprietary z-score sector ranking algorithm that runs over the entire market on Golden Rule 2 – Past Financial Performance sector growth factors when companies release their financial results. Any reranking could result in SGS’s becoming Borderline Star Growth Stocks and vice versa. Buffers and limitations on movements during reporting season are applied to the z-score to prevent excessive movement between SGS and Borderline Star Growth Stock groups.

Green stars

These denote Borderline Star Growth Stocks that rank second behind Star Growth Stocks. However, they are still regarded as high-quality growth businesses that suit investors who seek capital appreciation over the long-term.

BSGS’s must pass Golden Rule 1 Financial Health (two consecutive periods of Strong or Satisfactory), Golden Rule 2 Past Financial Performance (sector-specific growth thresholds such as: Return on equity (ROE), Return on Invested Capital (ROIC), Return on Assets (ROA), Net Profit Margins (NPM), Earnings Quality (EQ), Revenue Growth (RG) and Earnings Per Share Growth (EPSG)) and Golden Rule 3 Outlook and Active Risks (growth criteria).

BSGS’s sit outside of the approximately 30 Star Growth Stocks. This is done by a proprietary z-score sector ranking algorithm that runs over the entire market on Golden Rule 2 – Past Financial Performance sector growth factors when companies release their financial results. Any reranking could result in BSGS’s becoming Star Growth Stocks and vice versa. Buffers and limitations on movements during reporting season are applied to the z-score to prevent excessive movement between SGS and Borderline Star Growth Stock groups.

Purple stars

These denote Star Income Stocks that are high-quality income-producing businesses that suit investors who seek sustainable and attractive dividend yields over the long-term.

SIS’s are generally more mature businesses and defensive in nature since they prefer to payout profits to shareholders in the form of dividends rather than invest profits for future business growth and expansion opportunities.

SIS’s must pass Golden Rule 1 Financial Health (two consecutive periods of Strong or Satisfactory), Golden Rule 2 Past Financial Performance (sector-specific income factors and criteria such as: Operating Cashflow Per Share (OCFPS), Free Cashflow (FCF), Earnings Per Share (EPS), Dividends Per Share Growth (DPSG), Dividend Payout Ratio (DPR) and Dividend Yield (DY)) and Golden Rule 3 Outlook and Active Risks (income criteria). 

Grey stars

A grey star identifies that a company is currently under review and is in the process of being assessed for Star status

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