Valuation Technologies looks at a wide variety of valuation techniques. We recognize that each investor prefers his own method, and that as market conditions vary, so do the usefulness of a method. The table below describes some basic calculations used to value company stock, and an indication of each method's average effectiveness from 1972 through 1995. The analysis is based upon work done by BARRA, Inc.

BARRA is the leading provider of quantitative investment techniques. BARRA risk and return models are used by most of the prominent investment firms as an aid in forming their portfolios. These investors use BARRA models to predict the return and risk of individual stocks and portfolios. The chart below indicates some of the important variables that these investors are using in the portfolio construction process. The first chart indicates the Return Prediction Power of each variable, and whether a large value or a small value predicts positive return. The second provides definitions of the calculations.

For further information about our methodologies please Click Here. Or for an Article containing further insight about our "Growth/Value Continuum" Methodologies Click Here.