Strength of a stock and EPS rank

tradingbug · Jan 20, 2006

Thanks. Its amazing what a resource this board can be.

Kicking · Jan 20, 2006

good post

Quote from easyguru:

EPS ranking is a lagged indicator and what matters in the market is forward EPS or projections.
The IBD approach to calculating EPS ranking has some limitation and you should look at the raw data on EPS along with ranking. Many times the stock will make significant move by the time IBD EPS ranking changes. So the meat of the rally is over by the time it gets the high EPS rank.
Even though IBD claims its EPS and RS ranking is proprietary, it is not very difficult to figure out how they derive it and with raw data you can create the same ranking. If you search this board you will find formula to calculate RS ranking which will give you exact IBD ranking.
As to RS it is based on the complete stock universe not based on sector.
Between the EPS and RS ranking you should favor RS because many times stock move ahead of their earnings or without earnings based on their growth potential.
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Strength of a stock and EPS rank

tradingbug

Kicking