Under review

Suggestions For the OSV Action Score Portfolio

Brian Yu 10 months ago updated by OSV Support 10 months ago 3

I have noticed that a lot of cyclicals and garbage stocks made it on the A rank screener due to one time massive earnings. It's also very hard to figure out which is cyclical and which isn't. Apple is technically a cyclical, but I don't think they will suffer much of a downturn. (They are a one of a kind.) 

I suggest you build special evaluation screeners for different industries. Like for example, for a financial screener, you could make banks and insurance A ranks based on a high ROE and low P/B where as a cyclical can be more favorable when the P/S or EV/S is well below one. And pharmaceuticals could be A ranked based on good growth, Price to Research ratio, etc.  Just a random food for thought in how you can construct a "more accurate" winning stock picker.

EDIT: Also if you would like, I would be very happy to provide more specific ideas and details to help you guys construct specialized screeners. 

Hi Brian. Correct me if I'm wrong here but I think all that can be created using the existing screener. 

Brian's suggestion is spot on.  Here are just two admittedly cherry-picked examples:

Hess Corp (HES)

Current Price: $57.22

Median Fair Value: -$66.6 (minimum price for any stock is $0.00)

Action Score: D

Deutsche Bank (DB)

Current Price: $8.78

Median Fair Value: $53.35

Action Score: F

Nobody thinks DB is worth anywhere close to $53.35 per share. 

If is worth much higher than current price, then an F Action Score is nonsensical.

There are many, many more similar examples.

In a basic sense, the Action Score methodology works for most sectors, but not for Energy, Finance, Materials, Real Estate, and Utilities sectors.  So, there are myriad examples in these sectors where the purported Action Scores are, in reality, simply erroneous and misleading.  It should be incumbent on OSV to provide an Action Score methodology that is a rational approach for every company for which an Action Score is published.  As it stands now, both the Action Scores and Fair Values are substantially misleading for a significant percentage of companies.

Like Brian, if OSV is willing to commit to improving this situation, I would be "happy to provide more specific ideas and details" to work with and provide feedback to whoever would be making these needed changes.


Under review

Hi Brian & Jeff. Thanks so much for the suggestions. I'll have the status of this placed under review. Please know that Mike and the team are working hard on improving the service as it is right now. 

This is not just customer service talk. I can tell you that he has hired/re-hired a couple of developers to help fix and improve the web app and the stock analyzer spreadsheet. So I apologize to both of you if your suggestions will not be up the priority list for now.