CAT: Look Ahead to December 2020 Quarterly Results

This "look-ahead" post discusses how I came up with an estimate for Caterpillar's earnings for fiscal 2020's fourth quarter, which ended on December 31, 2020, by predicting each element of its Income Statement, from top-line Revenue to bottom-line Earnings Per Share (EPS) and everything in between. 

Once the company’s official results become available on January 29, I will compare the published Income Statement to the prediction and identify any surprises, positive or negative.  Examining these differences can identify what factors (e.g., profit margins, non-GAAP expenses, tax rates, share buybacks) are driving changes to a company's financial performance.

But, before we get into the details, let's take a step back and start with background information about Caterpillar.

Caterpillar is a leading manufacturer and servicer of machinery for construction, mining, energy production, and transportation.  The company also has finance subsidiaries that help customers and dealers purchase and lease Caterpillar and certain other products.  Demand for Caterpillar's products tends to vary as economic conditions strengthen and weaken and commodity prices rise and fall.  Not surprisingly, the slowdown induced by COVID-19 took a significant bite out of Caterpillar's sales in 2020.  Prospects for 2021 seem better.

With a market value of about $100 billion on a fully diluted basis, Caterpillar is included in the Dow Jones Industrial Average, Standard and Poors 500, Standard and Poors 100, Standard and Poors Dividend Aristocrats, New York Stock Exchange Composite, and Russell 1000 indices.

Caterpillar recorded profits of $3 billion on revenue of $44 billion during the last year. In the quarter that ended on 30 September 2020, Caterpillar earned $1.34 per share (excluding certain items), which significantly beat the $1.17 Wall Street consensus forecast. See https://tinyurl.com/y383pnzo for Caterpillar's most recent quarterly report.

Revenue in the September quarter totaled $9.9 billion, 23% less than last year's $12.8 billion. The Construction Industries business was responsible for 41% of overall revenue, and this unit's revenue fell by 23.3% compared to the year-earlier result. The Resource Industries business contributed 18% of revenue, and this unit's revenue fell by 21.4%. The Energy & Transportation unit supplied 42% of revenue, and the amount fell by 23.7%.

My starting point, if available, when estimating earnings is guidance provided by the company's management to financial analysts.  It's true that the company may downplay expectations somewhat to avoid disappointments, but the top managers ought to know better than anyone else how well their products and services are selling.  I also look for other information about the company in the news, and I take advantage of trends in the company's historical results.  While it makes my task a little more difficult, I also try to estimate earnings that conform to Generally Accepted Accounting Principles (GAAP).  Non-GAAP results, which most professionals focus on, are somewhat arbitrary and often exclude meaningful items.

Caterpillar's management communicated their expectations for the December 2020 quarter last October. This is a start, but it's not specific enough for my purposes.

This guidance is augmented by the monthly retail statistics published by Caterpillar; e.g., the November data shows that worldwide sales of machines were down by 11 percent.  See https://investors.caterpillar.com/financials/retail-statistics/default.aspx 

A data point that may not carry much weight in this unusual year is that Caterpillar's fourth-quarter revenues in recent years have, on average, been about 5.5 percent higher than revenue in the preceding quarter.

The following baseline Income Statement tries to take into account the factors mentioned above and other historical results.  I wouldn't say I have a whole lot of confidence in these figures, but they seem reasonable based on the information I have.  Earnings are estimated at $556 million ($1.02 per share).

Please note that my organization of revenues, expenses, gains, and losses, which I use for all analyses, can and often does differ in material respects from company-used formats.  The standardization facilitates cross-company comparisons.

#cat #caterpillar #lookahead #gcfr #gcfr2 #gauges

IBM: Look Ahead to December 2020 Quarterly Results

This "look-ahead" post discusses how I came up with an estimate for IBM's earnings for fiscal 2020's fourth quarter, which ended on December 31, 2020, by predicting each element of its Income Statement, from top-line Revenue to bottom-line Earnings Per Share (EPS) and everything in between. 

Once the company’s official results become available on January 21, I will compare the published Income Statement to the prediction and identify any surprises, positive or negative.  Examining these differences can identify what factors (e.g., profit margins, non-GAAP expenses, tax rates, share buybacks) are driving changes to a company's financial performance.

But, let's take a step back and start with background information about IBM.

IBM was the first giant computer company, and it was once one of the largest companies in the world.  When selling computing hardware became less profitable, IBM leverage its ties to the corporate world and increased its focus on information technology services for businesses.  Always a research powerhouse, the company subsequently developed cloud-computing and artificial intelligence services (e.g., "Deep Blue"), but, despite seeming advantages, IBM's annual revenue has been declining slowly for years.  IBM started to reinvent itself more dramatically in 2019 when it acquired Red Hat, a leading open-source software firm, for $34 billion.  The next step came in October 2020 when IBM announced it would spin off its managed infrastructure services unit into a separate, publicly traded company.  This business is currently part of the Global Technology Services division, and it brings in revenue of about $19 billion per year.  

With a market value of about $110 billion on a fully diluted basis, IBM is part of the Dow Jones Industrial Average, Standard and Poors 500, Standard and Poors 100, New York Stock Exchange Composite, and Russell 1000

IBM recorded profits of $8 billion on revenue of $75 billion during the four quarters that ended in September.  Revenue in the September quarter totaled $17.6 billion, 3% less than last year's $18.0 billion.  The Global Technology Services business was responsible for 37% of overall revenue, and this unit's revenue fell by 3.6% compared to the year-earlier result.  The Cloud & Cognitive Software business contributed 32% of revenue, and this unit's revenue grew by 6.8%.  The Global Business Services unit supplied 23% of revenue, and the amount fell by 4.7%.  See https://tinyurl.com/y34rev9g for IBM's most recent quarterly report.

My starting point, if available, when estimating earnings is guidance provided by the company's management to financial analysts.  It's true that the company may downplay expectations somewhat to avoid disappointments, but the top managers ought to know better than anyone else how well their products and services are selling.  I also look for other information about the company in the news, and I take advantage of trends in the company's historical results.  While it makes my task a little more difficult, I also try to estimate earnings that conform to Generally Accepted Accounting Principles (GAAP).  Non-GAAP results, which most professionals focus on, are somewhat arbitrary and often exclude meaningful items.

IBM's management did not, as mentioned above, communicate expectations, or "guidance," for the December 2020 quarter with their third-quarter report; however, they had previously signaled that the fourth quarter would include a hefty $2.3 billion ($2.36 per share) restructuring charge.  This charge has to be included in the baseline for the results that comply with U.S. Generally Accepted Accounting Principles (GAAP), which are the kind I follow.

Another more positive factor that has to be considered when setting expectations is that the fourth quarter is typically the best one of the year for IBM.

The following baseline Income Statement takes into account what I know about IBM and its historical results, but I have less confidence in the figures than I normally might.  The extent to which the company can compete effectively against large cloud service providers is still to be determined, and COVID-19 only makes the outlook even murkier.  The earnings estimate is a loss of $88 million, minus $0.10 per share.

Please note that my organization of revenues, expenses, gains, and losses, which I use for all analyses, can and often does differ in material respects from company-used formats.  The standardization facilitates cross-company comparisons.

#ibm #lookahead #gauges #gcfr #gcfr2 #nac_financialanalysis

INTC: Look Ahead to December 2020 Quarterly Results

This "look-ahead" post discusses how I came up with an estimate for Intel's earnings for fiscal 2020's fourth quarter, which ended on December 31, 2020, by predicting each element of its Income Statement, from top-line Revenue to bottom-line Earnings Per Share (EPS) and everything in between. 

Once the company’s official results become available on January 21, I will compare the published Income Statement to the prediction and identify any surprises, positive or negative.  Examining these differences can identify what factors (e.g., profit margins, non-GAAP expenses, tax rates, share buybacks) are driving changes to a company's financial performance.

But, before we get into the details, let's take a step back and start with background information about Intel.

Intel makes integrated circuits (i.e., "chips") used in computers, servers, and many other devices. Once the undisputed leader of the semiconductor industry, the emergence of mobile computing benefited competing firms that did a better job producing chips that consume less electrical power, a key consideration.  Intel has also lost market share because of delays it has experienced when manufacturing new generations of chips.  These and other factors forced Intel to consider other opportunities.  Intel acquired Altera Corp, a maker of programmable logic devices, in 2015, and Mobileye, which developed technology for autonomous driving, in 2017.  The Intel Security Group (ISecG) was a focus but it was divested in April 2017. Intel then divested most of its  smartphone modem business in December 2019.  More recently, Intel agreed to sell its NAND memory and storage business to SK hynix for $9 billion.

With a market value of about $200 billion on a fully diluted basis, Intel is part of the Dow Jones Industrial Average, Standard and Poors 500, Standard and Poors 100, NASDAQ 100, and Russell 1000 stock indices.

Intel earned roughly $22 billion on revenue of $78 billion during the four-quarter period that ended on 26 September 2020.  Revenue in the most recent quarter totaled $18.3 billion, 4% less than last year's $19.2 billion. The Client Computing Group business was responsible for 54% of overall revenue, and this unit's revenue grew by 1.4% compared to the year-earlier result. The Data Center Group business contributed 32% of revenue, and this unit's revenue fell by 7.5%. The Non-Volatile Memory Solutions Group unit supplied 6% of revenue, and the amount fell by 10.6%.

My starting point, if available, when estimating earnings is guidance provided by the company's management to financial analysts.  It's true that the company may downplay expectations somewhat to avoid disappointments, but the top managers ought to know better than anyone else how well their products and services are selling.  I also look for other information about the company in the news, and I take advantage of trends in the company's historical results.  While it makes my task a little more difficult, I also try to estimate earnings that conform to Generally Accepted Accounting Principles (GAAP).  Non-GAAP results, which most professionals focus on, are somewhat arbitrary and often exclude meaningful items.

Intel's management communicated their expectations, or "guidance" as it's known, for the December 2020 quarter last October (https://tinyurl.com/y3hw3vb7). 

I start with these guidance figures, but some additional assumptions are needed to prepare a complete Income Statement.  The following is the result, and I will use it to determine how Intel's fourth quarter differed from what was predicted.

Please note that my organization of revenues, expenses, gains, and losses, which I use for all analyses, can and often does differ in material respects from company-used formats.  The standardization facilitates cross-company comparisons.

#intel #intc #gcfr #gcfr2 #lookahead #nac_financialanalysis

PepsiCo: Gauge Analysis (updated December 6, 2020)

I have analyzed PepsiCo's financial statements to determine whether the reported figures suggest that the company's shares are a good value and reasonable risk for prudent investors. The way I performed this analysis was inspired by Benjamin Graham's recommendations in "The Intelligent Investor," which was first published in 1949 and is still one of the best-known books about value investing. I modified Graham's specific suggestions to fit modern times; however, the goal is the same: find stocks that are inexpensive relative to the company's strengths and aren't excessively risky.

The analysis evaluates investment suitability by gauging how well the company satisfies seven criteria.  GREEN, YELLOW, and RED grades indicate whether each gauge is fully satisfied, partially satisfied, or not satisfied at all.  An Overall Score between zero and 100, which takes the details of all gauges into account, is also computed.  While the analysis includes both growth and value criteria, the calculation of the Overall Score has been designed to favor companies that exhibit good value characteristics over fast growing firms that are expensive.  An Overall Score above 60 isn't easy to achieve, and it signifies that the company has enough value-investment appeal to be worth examining in more detail. 

First, a quick review of the company itself.

PepsiCo is a global food and beverage company. In addition to the eponymous soft drinks, PepsiCo also owns the Frito-Lay snack food business. In April 2020, PepsiCo acquired energy drink maker Rockstar for $3.85 billion. PepsiCo bought SodaStream in 2018 for $3.2 billion.

PepsiCo recorded profits of $7 billion on revenue of $69 billion during the last year. In the quarter that ended on 5 September 2020, PepsiCo earned $1.66 per share (excluding certain items), which significantly beat the $1.49 Wall Street consensus forecast. See https://tinyurl.com/y5gp5s3m for PepsiCo's most recent quarterly report.

Shares of PepsiCo now trade for about $146 each.  These shares can be found in the Standard and Poors 500, Standard and Poors 100, Standard and Poors Dividend Aristocrats, NASDAQ 100, and Russell 1000 stock indices.

Analysis Results:

PepsiCo's grades on the seven investment criteria are listed below, along with some of the financial figures that influenced these color assignments

1. The Company's Size is Substantial: GREEN

    Market Value: $202.7 billion (mega-cap)

2. The Company is Conservatively Financed: RED

    Current ratio = 0.9 (>2.0 is conservative)

    Long-term debt/Equity = 279% (<100% is conservative)

3. The Company Generates Stable Earnings: YELLOW

    Nineteen positive quarterly earnings reports in last 5 years (almost perfect)

    Earnings variability = 28% (high)

4. The Company Exhibits Earnings Growth: RED

    Owner Earnings growth rate (trailing year) = -6% (poor)

    Owner Earnings growth rate (five-year average) = -7% (poor)

    Free Cash Flow growth rate (trailing year) = 5% (weak)

    Free Cash Flow growth rate (five-year average) = -5% (poor)

5. The Company is Efficiently Profitable: GREEN

    Cash Flow Return On Invested Capital = 20% (good)

    Operating Profit/Sales = 14.5% (good)

6. The Company Pays a Healthy Dividend: YELLOW

    Dividends paid for the last 7 years or longer

    Dividend 5-year average growth rate = 8% (fair)

    Dividend = 87% of last year's FCF (sustainability is a significant concern)

7. The Company's Shares are Fairly Valued: RED

    Price/Owner Earnings (last year) = 38.8 (very expensive)

    Price/GAAP Earnings (five-year average) = 27.3 (high)

    Free Cash Flow/Market Value = 3.1% (low, less than the five-year average of 4.0%)

    Acquirer's Multiple = 23.9 (expensive)

    Price/Book Value = 14.9 (more expensive than the five-year average of 13.3)

    Price/Sales = 3.0 (more expensive than the five-year average of 2.6)

In summary, the analysis assigned PepsiCo two GREEN, two YELLOW, and three RED grades.  The resulting Overall Score is 25 of the 100 possible points, which is low.  The score is below the 60-point GCFR threshold, and, therefore, PepsiCo does not satisfy the GCFR criteria for value-investment consideration at this time.

The Overall Score would only increase to 51 points if the share price were to fall by 50%, from $145.85 to $72.66, all else being equal. Or, perhaps, the next earnings report from PepsiCo will include results that move the company's score up towards the threshold (or sink the score further).  Check this blog occasionally for updates on PepsiCo's performance and the resulting GCFR score.

This analysis reported here is a limited evaluation of the subject company.  It does not consider all material facts about the company's operations, finances, or future prospects.  The analysis relies on publicly available financial data assumed, but not guaranteed, to be accurate and consistent.  Readers are strongly encouraged to perform verify all data and perform their own independent analyses.  Other analytical approaches and screening criteria will be more applicable to investors having different goals, circumstances, and tolerance for investment risk.  This post is not and should not be considered investment advice, nor does it constitute an offer or solicitation to buy or sell any security. The author might have a long or short position in the subject company and/or its competitors. The analytical approach, the criteria used, and all calculations are subject to change without notification.

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 #pepsico    #pep    #gauges  #gcfr  #gcfr2 #valueinvesting   #nac_financialanalysis

Walmart: Gauge Analysis (updated November 26, 2020)

I have analyzed Walmart's financial statements to determine whether the reported figures suggest that the company's shares are a good value and reasonable risk for prudent investors. The way I performed this analysis was inspired by Benjamin Graham's recommendations in "The Intelligent Investor," which was first published in 1949 and is still one of the best-known books about value investing. I modified Graham's specific suggestions to fit modern times; however, the goal is the same: find stocks that are inexpensive relative to the company's strengths and aren't excessively risky.

The analysis evaluates investment suitability by gauging how well the company satisfies seven criteria.  GREEN, YELLOW, and RED grades indicate whether each gauge is fully satisfied, partially satisfied, or not satisfied at all.  An Overall Score between zero and 100, which takes the details of all gauges into account, is also computed.  While the analysis includes both growth and value criteria, the calculation of the Overall Score has been designed to favor companies that exhibit good value characteristics over fast growing firms that are expensive.  An Overall Score above 60 isn't easy to achieve, and it signifies that the company has enough value-investment appeal to be worth examining in more detail. 

First, a quick review of the company itself.

Walmart, the largest retailer in the U.S., is a discounter known for keeping its costs and prices low.  In addition to its many eponymous storers, Walmart also owns Sam's Club warehouses.  In response to competition from Amazon and other online retailers, Walmart has been investing heavily to make Walmart.com more capable and appealing.  This strategy is starting to pay off now, and Walmart's online sales have been increasing rapidly as COVID-19 accelerated the retail industry's transition from in-store to online shopping.  Walmart's reputation for low prices, especially for groceries, cleaning products, and other consumer staples, paid off in the early days of the pandemic when home-bound consumers were stocking up on supplies.  Walmart is now taking steps to reduce its overseas operations.  It announced an agreement to sell its UK subsidiary and business in Argentina.  Walmart also made a deal to sell a majority interest in its subsidiary in Japan.

Walmart recorded profits of $20 billion on revenue of $549 billion during the last year. In the quarter that ended on 31 October 2020, Walmart earned $1.34 per share (excluding certain items), which significantly beat the $1.18 Wall Street consensus forecast. See https://tinyurl.com/y2nm3ozs for Walmart's most recent quarterly report.

Shares of Walmart now trade for about $152 each.  These shares can be found in the Dow Jones Industrial Average, Standard and Poors 500, Standard and Poors 100, Standard and Poors Dividend Aristocrats, New York Stock Exchange Composite, and Russell 1000 stock indices.

Analysis Results:

Walmart's grades on the seven investment criteria are listed below, along with some of the financial figures that influenced these color assignments

1. The Company's Size is Substantial: GREEN

    Market Value: $432.6 billion (mega-cap)

2. The Company is Conservatively Financed: YELLOW

    Current ratio = 0.8 (>2.0 is conservative)

    Long-term debt/Equity = 47% (<100% is conservative)

3. The Company Generates Stable Earnings: YELLOW

    Nineteen positive quarterly earnings reports in last 5 years (almost perfect)

    Earnings variability = 22% (moderate)

4. The Company Exhibits Earnings Growth: YELLOW

    Owner Earnings growth rate (trailing year) = 8% (modest)

    Owner Earnings growth rate (five-year average) = 2% (weak)

    Free Cash Flow growth rate (trailing year) = 74% (terrific)

    Free Cash Flow growth rate (five-year average) = -1% (poor)

5. The Company is Efficiently Profitable: GREEN

    Cash Flow Return On Invested Capital = 25% (very good)

    Operating Profit/Sales = 4.1% (meager)

6. The Company Pays a Healthy Dividend: GREEN

    Dividends paid for the last 7 years or longer

    Dividend 5-year average growth rate = 1.9% (weak)

    Dividend = 25% of last year's FCF (easily sustainable with room to grow)

7. The Company's Shares are Fairly Valued: RED

    Price/Owner Earnings (last year) = 26.0 (high)

    Price/GAAP Earnings (five-year average) = 34.5 (expensive)

    Free Cash Flow/Market Value = 5.6% (modest, less than the five-year average of 6.9%)

    Acquirer's Multiple = 21.0 (expensive)

    Price/Book Value = 4.9 (more expensive than the five-year average of 3.6)

    Price/Sales = 0.8 (more expensive than the five-year average of 0.6)

In summary, the analysis assigned Walmart three GREEN, three YELLOW, and one RED grades.  The resulting Overall Score is 40 of the 100 possible points, which is low.  The score is below the 60-point GCFR threshold, and, therefore, Walmart does not satisfy the GCFR criteria for value-investment consideration at this time.

The share price would theoretically have to fall by 42.4%, from $151.83 to $87.48, all else being equal, to lift the Overall score to the 60-point threshold. Or, perhaps, the next earnings report from Walmart will include results that move the company's score up towards the threshold (or sink the score further).  Check this blog occasionally for updates on Walmart's performance and the resulting GCFR score.

This analysis reported here is a limited evaluation of the subject company.  It does not consider all material facts about the company's operations, finances, or future prospects.  The analysis relies on publicly available financial data assumed, but not guaranteed, to be accurate and consistent.  Readers are strongly encouraged to perform verify all data and perform their own independent analyses.  Other analytical approaches and screening criteria will be more applicable to investors having different goals, circumstances, and tolerance for investment risk.  This post is not and should not be considered investment advice, nor does it constitute an offer or solicitation to buy or sell any security. The author might have a long or short position in the subject company and/or its competitors. The analytical approach, the criteria used, and all calculations are subject to change without notification.

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 #walmart    #wmt    #gauges  #gcfr  #gcfr2 #valueinvesting   #nac_financialanalysis

Home Depot: Gauge Analysis (updated November 24, 2020)

I have analyzed Home Depot's financial statements to determine whether the reported figures suggest that the company's shares are a good value and reasonable risk for prudent investors. The way I performed this analysis was inspired by Benjamin Graham's recommendations in "The Intelligent Investor," which was first published in 1949 and is still one of the best-known books about value investing. I modified Graham's specific suggestions to fit modern times; however, the goal is the same: find stocks that are inexpensive relative to the company's strengths and aren't excessively risky.

The analysis evaluates investment suitability by gauging how well the company satisfies seven criteria.  GREEN, YELLOW, and RED grades indicate whether each gauge is fully satisfied, partially satisfied, or not satisfied at all.  An Overall Score between zero and 100, which takes the details of all gauges into account, is also computed.  While the analysis includes both growth and value criteria, the calculation of the Overall Score has been designed to favor companies that exhibit good value characteristics over fast growing firms that are expensive.  An Overall Score above 60 isn't easy to achieve, and it signifies that the company has enough value-investment appeal to be worth examining in more detail. 

First, a quick review of the company itself.

Home Depot operates about 2300 big-box home improvement stores in the U.S., Canada, and Mexico that cater both to professionals and do-it-yourself homeowners.  Recognizing the value of its employees during the COVID-19 pandemic, Home Depot hiked their pay and benefits.  In November 2020, Home Depot announced a deal to acquire HD Supply Holdings, a former subsidiary, for $8 billion.  HD Supply distributes maintenance, repair and operations (MRO) products for use in multi-family and hospitality buildings.

Home Depot recorded profits of $12 billion on revenue of $126 billion during the last year. In the quarter that ended on 1 November 2020, Home Depot earned $3.18 per share, which missed the $3.68 Wall Street consensus forecast. See https://tinyurl.com/yxqu3gxd for Home Depot's most recent quarterly report.

Shares of Home Depot now trade for about $271 each.  These shares can be found in the Dow Jones Industrial Average, Standard and Poors 500, Standard and Poors 100, New York Stock Exchange Composite, and Russell 1000 stock indices.

Analysis Results:

Home Depot's grades on the seven investment criteria are listed below, along with some of the financial figures that influenced these color assignments

1. The Company's Size is Substantial: GREEN

    Market Value: $292.6 billion (mega-cap)

2. The Company is Conservatively Financed: RED

    Current ratio = 1.4 (>2.0 is conservative)

    Long-term debt/Working Capital = 360% (<150% is conservative)

3. The Company Generates Stable Earnings: GREEN

    Twenty positive quarterly earnings reports in last 5 years (perfect)

    Earnings variability = N/A (negligible)

4. The Company Exhibits Earnings Growth: GREEN

    Owner Earnings growth rate (trailing year) = 16% (good)

    Owner Earnings growth rate (five-year average) = 12% (good)

    Free Cash Flow growth rate (trailing year) = 62% (terrific)

    Free Cash Flow growth rate (five-year average) = 18% (good)

5. The Company is Efficiently Profitable: GREEN

    Cash Flow Return On Invested Capital = 63% (excellent)

    Operating Profit/Sales = 14.0% (good)

6. The Company Pays a Healthy Dividend: GREEN

    Dividends paid for the last 7 years or longer

    Dividend 5-year average growth rate = 22% (very good)

    Dividend = 36% of last year's FCF (easily sustainable with room to grow)

7. The Company's Shares are Fairly Valued: RED

    Price/Owner Earnings (last year) = 22.8 (moderate to pricey)

    Price/GAAP Earnings (five-year average) = 30.7 (expensive)

    Free Cash Flow/Market Value = 6.2% (appealing, more than the five-year average of 5.0%)

    Acquirer's Multiple = 17.8 (expensive)

    Price/Book Value = 100.0 (more expensive than the five-year average of 62.9)

    Price/Sales = 2.3 (more expensive than the five-year average of 2.0)

In summary, the analysis assigned Home Depot five GREEN, zero YELLOW, and two RED grades.  The resulting Overall Score is 54 of the 100 possible points, which is not high enough.  The score is below the 60-point threshold, and, therefore, Home Depot does not qualify at this time for more in-in-depth consideration.

The share price would theoretically have to fall by 13.1%, from $271.41 to $235.87, all else being equal, to lift the Overall score to the 60-point threshold.  Of course, sustained improvements to the company's financial performance is the best way to raise the Overall Score. Check this blog occasionally for updates on how Home Depot's score actually changes in response to new data.

This analysis reported here is a limited evaluation of the subject company.  It does not consider all material facts about the company's operations, finances, or future prospects.  The analysis relies on publicly available financial data assumed, but not guaranteed, to be accurate and consistent.  Readers are strongly encouraged to perform verify all data and perform their own independent analyses.  Other analytical approaches and screening criteria will be more applicable to investors having different goals, circumstances, and tolerance for investment risk.  This post is not and should not be considered investment advice, nor does it constitute an offer or solicitation to buy or sell any security. The author might have a long or short position in the subject company and/or its competitors. The analytical approach, the criteria used, and all calculations are subject to change without notification.

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 #homedepot    #hd    #gauges  #gcfr  #gcfr2 #valueinvesting   #financialanalysis

Stock-Based Compensation

 This is an excellent thread about Stock-Based Compensation and its true costs.

Twitter Thread by @10kdiver