On another post I saw a link to http://www.ascii-data.com/ which is very interesting. After downloading the spreadsheet I saw a column, 'CGVI' which I am not farmilar with. Thanks to Google I got to http://www.lainie.com.au/sharesguru/index.html where I could download a powerpoint on the subject.
Comparitive Growth and Value Indicator
In a nutshell:
CGVI% = ((EPS + DPS) / Share Price) + ((EPS - DPS) / NTA Backing)
It appears that the theory goes:
IF CGVI > 30 Very good buying opportunity (ensure trend is in right direction)
IF CGVI > 24 Good buying opportunity (ensure trend is in right direction)
IF CGVI > 20 Accumulate if already owned
IF CGVI > 17 Hold if owned
IF CGVI > 12 Stay out
My assumption is that anything less than 12, avoid like the plague.
I also assume that companies that either do not have a high dividend payout ratio, or those that are paying out dividends not via earnings but by borrowings, and those with a very low share price or NTA will cause anomolies in this index.
Does anyone use this indicator. If so, what conditions have you put on it's use?