Reuters Performance Rating: Outperform - Why?
posted on
Feb 09, 2008 09:59AM
Reuters sticks with it's highest rating for PTSC. Why?
Below is a summary of Reuters rating methods. It sounds logical and has been successful - no gaurantee. Note that the only area that falls short of perfect score is "Share Price Movement".
Reuters words:
Reuters ratings are based on a proprietary model that leverages widely accepted statistical methods and financial concepts to select attributes shown to be strong indicators of futurestock price performance and applies these to rank stocks along a normal distribution curve. Ranks for Fundamental Quality, Value Catch-up, Operational Trends and Technical Factors are combined into a Composite Rating of Outperform, Neutral or Underperform. PTSC shares are presently rated OUTPERFORM.No forecast is made for the stock market as a whole.However, we do believe that whichever way the marketmoves, stocks rated OUTPERFORM have, in theaggregate, a higher probability of performing better thanmost others.Fundamental Quality Component: OutperformThis rating is based on characteristics traditionally associated with "good" companies. We focus on how each companymeasures up against others, and give careful attention to recent improvement or slippage relative to other companies. Value Catch-up Component: OutperformThis rating measures the extent to which the share price adequately reflects improving or eroding fundamentals, and favorsshares whose prices have been slower to "catch up" to improving performance measures. TTM = Trailing Twelve Months. Operational Trends Component: OutperformThis rating reflects how strong a company's recent Sales and EPS (reported as per GAAP) growth have been relative to othercompanies we rate. MRQ = Most Recent Quarter. TTM = Trailing Twelve Months. Technical Factors: NeutralThis rating is based on analyses of share pricemovements over a variety of time periods. Wecompare performance characteristics of individualstocks with those of all the others we rate.Generally speaking, our goal is to favor up-trendingshares that have experienced recent correctionsand de-emphasize down-trending sharesexperiencing uncharacteristic periods of strength.Here is how PTSC shares performed during thevarious periods we examined. Price ChangePast 7 days 1.2%Past 30 days -16.0%Past 60 days -37.7%Change for Past 180 Days: -12.5% Open on 8/13/07 Close on 2/7/08$0.48