Steve Hach

Long/short equity, newsletter provider, long only
Steve Hach
Long/short equity, newsletter provider, long only
Contributor since: 2007
Company: ValuEngine
By "outlier" I mean when a stock has a really good looking forecast like that it is always best to be wary. Of course a 5% 1-month gain or a 45% 12 month gain is easily achieved. But, it can be the case that the model reads some sort of volatility or inflection point and extrapolates that out and makes a particular equity look to good to be true. Due diligence and further research is always required.
Yes JJ, that is correct. and those are on a percentage basis.
short term forecasts are for the one month time frame. long term are for 12 months. Our forecast model is described here:
Keep in mind that the valuation model and the forecast model make radically different assumptions about the nature of the market. One looks at pure fundamentals while the other looks at how the stock has traded in the past and tries to make future predictions.
More here:
Valuation models may have a tough time in the face of big market momentum--and the market is always right. Regardless, the model is always going to rate the stocks relative to each other and in the case of oil/energy it thinks they are overrated on fundamentals--but it is a computer and cannot know how things are going with Ghaddafi or in Japan.
Long term, the overall ratings system and forecast figures do tend to provide a high degree of predictability and higher rated stocks provide better results than poorly rated ones...
But here we find that a stock is overvalued but it may remain so for a long time and you would have trouble shorting in a speculative bubble or oil shock anyway.
and, we typically provide the top 5 lists each week based on news headlines and overall market interest.